Shanghai home market strengthens amid flood of new supplies

Shanghai's new home market continues to recuperate amid rapidly increasing new supply, the latest market data showed.

The total area of new residential properties sold, excluding government-subsidized affordable housing, jumped 20.2 percent week over week to around 182,000 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a regular report released on Monday.

On the supply side, about 221,000 square meters of new homes spanning 10 projects were released into the local market last week, compared with some 49,000 square meters launched during the previous seven-day period, according to Centaline data.

Across the city, the Nanhui region of the Pudong New Area remained the most popular area for the third straight week with sales totaling around 30,000 square meters, a weekly increase of 42.8 percent. Remote Qingpu District came most closely with transactions hitting 28,000 square meters. Seven other districts managed to stay above the 10,000-square-meter mark for the week.

The average price of new homes, meanwhile, fell 5.9 percent week over week to 54,925 yuan (US$7,742) per square meter, with increased sales registered in the medium-end segment.

"A major rebound in new supply helped fuel sentiment among home buyers and the rally might extend through the end of this month as developers are eager to get a better-looking half-year report," said Lu Wenxi, Centaline's senior researcher. "And there was again one project managing to sell more than 100 units, a traditional sign of confidence in the market."

A development in Nanhui with an average price of 57,201 yuan per square meter dwarfed all after unloading 9,641 square meters, or 102 units, during the seven-day period. A project in Qingpu followed immediately after selling 5,796 square meters, or 46 apartments, for an average price of 30,256 yuan per square meter.

In the top 10 list by sales volume, none ranked above the 100,000-yuan-per-square-meter mark and four cost less than 50,000 yuan per square meter.