Outlying districts continue to lead in new house sale rebound

Shanghai's new housing sales rebounded last week amid improved new supply, the latest market data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, rose 22.1 percent to 96,900 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a report released today.

Outlying districts continued to lead. Qingpu District, where new home sales dipped 3.5 percent from a week earlier, finished at 16,400 square meters. It was immediately followed by Nanhui in the Pudong New Area, where weekly transactions of new homes surged 208 percent to 15,100 square meters. In Pudong, sales of new homes jumped 49.5 percent to 13,600 square meters.

The average cost of a new home rose 10.4 percent from a week earlier to 52,883 yuan (US$8,096) per square meter, according to Centaline data.

"Despite the rebound, overall sentiment among home buyers was still lacklustre as new home transactions failed to exceed the 100,000-square-meter threshold for the second consecutive week," said Lu Wenxi, senior manager of research at Centaline. "Notably, seven out of the 10 best-selling projects cost more than 60,000 yuan per square meter, leading to the double-digit increase in average price."

Citywide, a project in Nanhui outperformed others by selling 8,286 square meters of new homes, or 41 units, during the seven-day period. With an average price of 31,150 yuan per square meter, it is also the cheapest project in the top 10 list. Two developments in Pudong, one costing 78,891 yuan per square meter and the other bearing a price tag of 64,860 yuan per square meter, closely trailed with weekly sales of 3,497 square meters, or 23 units, and 3,164 square meters, or 29 units, respectively.

On the supply side, about 22,800 square meters of new homes, all located in remote areas, were released onto the local market last week, compared to zero new supply registered in the previous seven-day period, Centaline data showed.

"It was rare that new home supply was so inadequate in June, which should be a critical month for real estate developers as most of them, if not all, would gear up for a better half-year performance," Shanghai Homelink Real Estate Agency Co said in a separate report. 

"That would probably impose great pressure on developers' capital flow as well as their business performance for the whole year and because of that, we expect to see a major recovery in new supply in the second half, coupled with further cuts in price."