Year-end housing bounce fails to come through

Prices outstripped inflation and the area sold boomed. But the market expected more.

Shanghai's new housing market grew in the last month of 2018 with a surge in new supply and price growth outstripping inflation, the latest weekly report by Centaline  Property shows.

But the market did not see the traditional year-end bounce.

The area of new residential properties sold, excluding government-subsidized affordable housing, climbed 6.4 percent from November to around 515,000 square meters last month, Shanghai Centaline Property Consultants Co said yesterday.

"This was not the major rebound that the market had anticipated for the last month of a year which usually records rather strong sales as most real estate developers gear up to boost their annual sales," said Lu Wenxi, a senior research manager at Centaline.

"The overall buying momentum seemed sluggish, particularly during the first three weeks when seven-day transactions hovered around 100,000 square meters only."

The average cost of a new home rose 5.3 percent from a month earlier to 61,619 yuan (US$8,990) per square meter. The latest data, for November, put inflation at 2.2 percent.

Of the 10 most popular projects, four sold for more than 80,000 yuan per square meter, with two at more than 100,000 yuan per square meter, Centaline said.

A residential development in Dachangin outloying Baoshan District topped sales, selling 30,501 square meters, or 259 units, in December, for an average price of 52,661 yuan per square meter.

It was closely trailed by a project in Xujing in remote Qingpu District 56,779 yuan per square meter, which unloaded some 23,539 square meters, or 219 units.

Citywide, about 1.316 million square meters of new residential properties were launched onto the market for sale last month, an increase of 116 percent from November, Centaline said.

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