After May surge, Shanghai home market falters in June

Cao Qian
Citywide home sales by area contracted by 23 percent in the latest month, while average price per square meter dropped by over 11 percent.
Cao Qian

Shanghai’s new housing market retreated in June amid lost sentiment among both buyers and real estate developers, the latest market data showed.

By area, the amount of new residential properties sold, excluding government-subsidized affordable housing, fell 23 percent from a month earlier to 813,000 square meters, according to a regular monthly report released on Wednesday by Shanghai Centaline Property Consultancy Co.

“It was an expected withdrawal of the market after sales, driven by the burst of pent-up demand due to the COVID-19 outbreak, hit a 44-month high in May,” said Lu Wenxi, Centaline's senior research manager. "A decline in new supply, coupled with some seasonal factors, also damped momentum among home seekers.”

The average price of a new home, meanwhile, dropped 11.2 percent from May to 56,237 yuan (US$7,948) per square meter in June, as notably fewer properties in the high-end segment were sold compared with a month ago.

Around the city, a total of 487 new residential units bearing a price tag of 100,000 yuan per square meter or more were unloaded last month, a plunge of 51.5 percent from May, according to Centaline data.

In the top 10 list by sales, only one project stayed above the 100,000-yuan-per-square-meter mark, compared with three registered in May.

Dwarfing all was a project in former Zhabei, now part of Jing’an District, which sold 19,329 square meters, or 200 apartments, for an average price of 92,316 yuan per square meter. It was most immediately trailed by a development in Nanhui of the Pudong New Area, which unloaded over 18,000 square meters, or 186 units, for an average price of around 57,000 yuan per square meter.

On the supply side, about 518,000 square meters of new housing covering all segments from luxury to low-end were launched into the local market last month, a further decrease of 14.1 percent from May.

For July, the current strength of the market would most likely extend, though a moderate fall in sales is possible as well, Lu predicted.   

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