'Extremely slack momentum' plagues new home market

Shanghai's new home sales market suffered a major retreat last week, putting an end to a two-week rally amid the sluggish sentiment of both real estate developers and buyers, the latest market data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 43.6 percent from a week earlier to about 100,000 square meters during the seven days to Sunday, Shanghai Centaline Property Consultants Co said in a report released on Monday.

"Due to a lack of support from the medium to low-end segment, overall transaction volume dropped to a low level again," Lu Wenxi, senior manager of research at Centaline said. "Meanwhile, comparatively better performance in the medium to high-end sector continued to push up the average price."

Around the city, the Pudong New Area became the most sought-after area with some 23,000 square meters of new homes sold, a week-over-week surge of more than 50 percent. Notably, several downtown districts including Jing'an, Changning and former Luwan all recorded zero sales, evidence for extremely slack momentum.

The average price of a new home climbed 7.3 percent from a week earlier to 62,580 yuan (US$9,080) per square meter.

A project in remote Chongming District became the most popular after selling 7,040 square meters, or 50 units, of new homes for an average price of 33,748 yuan per square meter.

Among the top 10 list, seven projects cost more than 50,000 yuan per square meter on average, with two standing above the 100,000-yuan-per-square-meter threshold, according to Centaline data.

On the supply side, only one development, or 31,000 square meters of new homes in total, was released onto the local market, compared to about 325,000 square meters launched during the previous seven-day session.