Slow month end for home sales

Cao Qian
Home buying sentiment retreated in Shanghai last week.
Cao Qian

Home buying sentiment retreated in Shanghai last week, failing to extend strength through the end of the month, which usually registers a rise in transactions.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 1.9 percent to around 173,000 square meters in the seven days to Sunday, Shanghai Centaline Property Consultants Co said in its regular Monday report.

Across the city, remote Qingpu and Songjiang continued to attract most home buyers with more than 20,000 square meters of new houses being sold in each district. Fengxian and Jiading also performed quite well by unloading over 17,000 square meters each. Huangpu sold nearly 9,000 square meters of new residential properties last week, quite unusual for a downtown district.

Citywide, the average cost of a new home slipped 1.9 percent to 54,483 yuan (US$7,888) per square meter, according to Centaline data.

"The week-over-week fall in transaction volume was rather unexpected as real estate developers often gear up in the last couple days of a month to get a better looking monthly report," said Lu Wenxi, Centaline's senior research manager. “As temperatures climb, coupled with rather sluggish new supply recently, we don’t see much chance for a major rebound in the coming few weeks.”

Four of the top 10 projects in terms of transaction area sold for more than 50,000 yuan per square meter with one costing over 100,000 yuan per square meter. Outperforming all was one luxury development in Huangpu, which offloaded 6,017 square meters, or 44 apartments during the seven-day period for 108,656 yuan per square meter. It was most closely trailed by a project in Jing'an, which recorded sales of 3,956 square meters, or 31 units, for an average price of 86,259 yuan per square meter.

On the supply side, four projects located in outlying districts such as Chongming, Fengxian and Songjiang were released into the local market last week, adding a total of 100,000 square meters into the city's new housing inventory. That compared with some 15,000 square meters launched a week earlier, Centaline data showed.

For the past May, overall transaction volume of new residential properties dropped 37.9 percent from April to some 687,000 square meters, failing to meet earlier market expectations, Centaline data showed.

“Despite a quite good start in the first week of the month when about 160,000 square meters of new homes were sold, May just finished pretty weak partly due to weak momentum among real estate developers,” Lu said. “Sales could go further south if there is no major rise in new supply.”

Last month, only about 459,000 square meters of new homes were released into the local market, a decrease of 37.9 percent from April, according to Centaline data.  

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