Soar in supply sees new home sales improve for second week

New home buying sentiment continued to improve in Shanghai for the second week amid a soar in supply, the latest market data showed.

The area of new homes sold, excluding government-subsidized affordable housing, rose 10.4 percent to about 92,000 square meters during the seven-day period ending on Sunday, Shanghai Centaline Property Consultants Co said in a report released today.

Across the city, outlying Qingpu District replaced Songjiang District to become the most sought-after area, with weekly sales hitting 29,000 square meters, a surge of 190 percent from the previous week. Songjiang and Pudong New Area followed with new housing sales of 13,000 square meters and 12,000 square meters respectively.

The average price of new homes, meanwhile, fell 4.3 percent from a week earlier to 45,211 yuan (US$7,182) per square meter, mainly due to a structural shift, according to Centaline data.

By projects, a residential development in Qingpu with a price tag of less than 30,000 yuan per square meter emerged as the most popular project after selling 20,265 square meters, or 212 units, last week, far outnumbering its closest competitor which registered seven-day sales of 6,123 square meters, or 60 units, only. 

By average price, six of the top 10 projects by volume cost more than 50,000 yuan per square meter, Centaline data showed.

"While momentum among home buyers continued to strengthen at a moderate pace, real estate developers seemed to be extremely aggressive in launching their products onto the market," said Lu Wenxi, senior manager of research at Centaline. "The latest outburst in supply will probably boost sales over the coming weeks."

About 554,000 square meters of new residential properties spanning 12 projects, targeting buyers with various budgets, were released to the local market for sale last week, a surge of 463.5 percent from the previous week.

"About 5,100 new housing units were launched last week around the city, the highest weekly supply in two and a half years," Shanghai Homelink Real Estate Agency Co said in a separate report released today. "By proximity to city center, some 1,800 units are located in rather central areas of the city while the rest sit in suburban districts."

Notably, one Greenland project in Qingpu released more than 1,100 units in one single batch, Homelink data showed.

For the rest of this month, another 1,100 units spanning three projects are set to be launched and will therefore lift April's total new home supply to some 7,900 units, or the highest in 23 months, according to Homelink research.