FTZ expansion boosts home sales

New home sales in Shanghai rebounded last week, boosted by robust performance in Lingang, newly added to Shanghai's pilot free trade zone.

The area of new residential properties sold, excluding government-subsidized affordable housing, rose 38.6 percent to about 158,000 square meters during the seven-day period through Sunday, Shanghai Centaline Property Consultants Co said in its regular Monday report.

"Outlying areas, particularly the Nanhui area and Fengxian District, recorded strong sales last week whilst most downtown districts continued to see lacklustre sentiment," said Lu Wenxi, Centaline's senior research manager. "Notably, two projects in Lingang made into the top 10 list with one of them taking second position."

The Nanhui area, where Lingang is located, led with seven-day sales of 30,000 square meters, compared with 13,000 square meters a week earlier. It was most closely trailed by Fengxian, where some 27,000 square meters of new homes were sold during the same period. That compared with some 24,000 square meters last week.

Earlier this month, the Shanghai FTZ was expanded to include Lingang. 

"We expect the strong momentum to persist in Lingang but new home prices in the area will generally remain stable because projects available for sale at the moment received their sales permits which include a price cap before the govenrment announcement," Lu added.

The average cost of a new home fell 1.2 percent from a week before to 49,578 yuan (US$7,025) per square meter, below the 50,000-yuan-per-square-meter barrier for the second time this year, Centaline data showed.

In last week's top 10 list by area, four projects sold for more than 50,000 yuan per square meter. One development in Putuo District dwarfed all after unloading 6,739 square meters, or 71 apartments, for an average price of over 87,700 yuan per square meter.

On the supply side, a total of 205,000 square meters of new houses, including two luxury developments in Xuhui and Jing'an districts, were released onto the local market, a surge from 37,000 square meters launched a week earlier.