New home sales in Shanghai rebound again

New home sales in Shanghai continued to rebound last week but the market was plagued by zero new supply, a latest industry report showed.

The area of new homes sold, excluding government-subsidized affordable housing, climbed 17.6 percent to 113,900 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a report released on Monday.

The city's remote Qingpu and Songjiang districts registered weekly transactions of 21,200 square meters and 16,800 square meters, up 29.3 percent and 154.5 percent, respectively. 

The average cost of a new home dipped 2.11 percent from a week earlier to 51,769 yuan (US$7,790) per square meter, according to Centaline data.

"Notably, several central districts such as former Jing'an, Changning and Hongkou all registered zero sales while on the supply side, not a single new housing unit was launched in the market," said Lu Wenxi, senior manager of research at Centaline. "Projects targeting customers seeking upgrading, meanwhile, continued to dominate the top 10 list."

Six out of the 10 most popular projects cost above 50,000 yuan per square meter on average, with two of them selling nine units each for over 100,000 yuan per square meter during the seven-day period, according to Centaline data.

Also, a residential project in remote Songjiang sold 4,825 square meters of new homes, or 38 units, for an average 52,144 yuan per square meter. It was followed by a development in Nanhui, Pudong New Area, which sold 3,820 square meters, or 16 units, for an average 31,253 yuan per square meter.

For June, new home sales dropped 20 percent from May to 437,000 square meters amid a weak supply, failing to meet earlier expectations of analysts. These new homes sold for an average 50,874 yuan per square meter, a month-over-month dip of 0.9 percent, according to a separate report released by Centaline.

Meanwhile, only some 23,000 square meters of new housing spanning two projects were launched in the market last month, down 93.2 percent from May.

"That was the lowest monthly supply registered so far this year which was also very unusual for June, when real estate developers often geared to boost their half-year performance by introducing more projects into the market," Lu said. 

"Very likely, the generally sluggish momentum among both real estate developers and home buyers would continue to prevail this month which itself is the traditional low season for property purchases," Lu said.