Shanghai home market continues momentum ahead of Chinese New Year

New home sales continued to climb in Shanghai last week amid stronger performance in the medium-to-low end segment, the latest market data show.

The total area of new residential properties sold, excluding government-funded affordable housing, edged up 1.5 percent to around 173,000 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in its latest weekly report.

Citywide, Fengxian District jumped to first place with weekly transactions hitting some 40,000 square meters. The Pudong New Area, and the outlying districts of Qingpu and Songjiang, trailed most closely with seven-day sales between 17,000 and 19,000 square meters.

"Ample new supply launched into the market recently did help lift sentiment among home buyers, enabling weekly transactions to stay at a relatively high level for another week," said Lu Wenxi, Centaline's senior research manager. "Some real estate developers chose to release their projects to boost sales before the Chinese New Year holiday kicks off in about two weeks."

Meanwhile, the average price of a new home fell 7.2 percent to 50,679 yuan (US$7,269) per square meter last week.

Outperforming all was a development in Fengxian, which sold 20,484 square meters, or 235 units of new homes, for an average cost of 21,021 yuan per square meter. Two other projects with a price tag of less than 30,000 yuan per square meter squeezed into the top 10 best-selling list. Of the 10 most popular projects, three sold for more than 50,000 yuan per square meter including one above the 100,000-yuan-per-square-meter mark.

On the supply side, despite this being a traditionally slow season, a total of 311,000 square meters of new residential properties, spanning 11 projects, were released into the local market, compared with some 155,000 square meters recorded the previous week, according to Centaline data.

"We expect the current strength of the market to extend for another week or two with abundant new supply as well as rather robust momentum among both developers and buyers," Lu predicted.