New home sales plunge due to buyers' sluggish sentiment

Sluggish sentiment among buyers dragged weekly new home sales below the 100,000-square-meter threshold in Shanghai, the latest market data showed.

The area of new residential properties sold, excluding government-funded affordable housing, plunged 37.8 percent from a week earlier to about 89,000 square meters during the seven days to Sunday, Shanghai Centaline Property Consultants Co said in a report released on Monday.

The average cost of a new home fell 13.9 percent to 58,696 yuan (US$8,492) per square meter, according to Centaline data.

"While downtown areas such as Pudong New Area and Xuhui District continued to be among the most sought-after places among new home buyers, transaction volumes decreased significantly," said Lu Wenxi, senior manager of research at Centaline. "Notably, a low-end project in remote Chongming District grabbed the top place after selling almost 300 apartments, which was quite rare in recent weeks."

A total of 33,000 square meters of new houses were sold in Chongming last week, with one project, which asked for 28,306 yuan per square meter on average, managing to fetch sales of 32,567 square meters, or 292 units, alone.

Pudong, where weekly sales of new homes dropped 48.3 percent to 15,000 square meters, followed Chongming most closely. Xuhui came as the third with transaction volume of less than 5,000 square meters, a week-over-week fall of 70.6 percent, Centaline data showed.

Among the top 10 best-selling projects, eight were medium to high-end developments with a price tag of more than 80,000 yuan per square meter on average.

New home supply, meanwhile, continued to increase last week, giving hopes that sales might get a decent recovery in coming weeks, Centaline predicted.

A total of 303,000 square meters of new residential properties spanning seven projects, were released into the local market for sale, an increase of 26 percent from the previous week.