New home buying sentiment hits 9 month high

New home buying sentiment in Shanghai rose to its highest level in nine months, with the average price hitting a record high amid robust sales in the medium to high-end segment, the latest market data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, climbed 18.6 percent from April to some 549,000 square meters last month, Shanghai Centaline Property Consultants Co said in a report released on Friday.

The average cost of new homes jumped 9.3 percent from a month earlier to 51,321 yuan (US$7,992) per square meter in May, mainly due to a structural shift, Centaline data showed.

"Ample supply released in April helped boost transaction in May with medium to high-end properties being popular among buyers, particularly in the second half of last month," said Lu Wenxi, senior manager of research at Centaline.

"As we can see, out of the 10 most popular projects, three cost more than 50,000 yuan per square meter on average."

Citywide, the number of new housing units sold for more than 80,000 yuan per square meter totaled 573 last month, a surge of 109 percent from April, according to Centaline data.

By project, one residential development in outlying Songjiang District bearing a price tag of 38,667 yuan per square meter on average registered monthly sales of 27,969 square meters, or 293 units, outnumbering any other counterpart in the city. A Poly Real Estate project in northern Baoshan District came in as the second most popular development of the month after selling 17,715 square meters, or 174 units, for an average price of 50,635 yuan per square meter.

On the supply side, only 336,000 square meters of new houses, the majority being medium to low-end properties, were launched into the local market in May, a month-over-month plunge of 68.2 percent, according to Centaline.

"Between April and May, a total of 11,900 units of new homes were launched onto the local market — about 4,600 units out of that had been sold during the same period," Shanghai Homelink Real Estate Agency Co wrote in a separate report released today. "That means there are still quite abundant options available in the market and new home seekers can probably take their time before they make their final decision."