Housing market rebounds as buyers snap up suburban homes

Shanghai's new housing market has recuperated after a two-week correction with homes in outlying areas becoming the most sought-after among buyers.

The total area of new residential properties sold, excluding government-funded affordable housing, jumped 37.7 percent week over week to 261,000 square meters during the seven-day period ending Sunday, Shanghai Centaline Property Consultants Co said in a regular report issued on Monday.

Citywide, suburban Nanhui, formerly a district and now part of the Pudong New Area, dwarfed all by selling some 45,000 square meters of new homes. Pudong followed by unloading 35,000 square meters. Qingpu District registered sales of around 33,000 square meters, according to Centaline data.

"Sentiment among both home seekers and real estate developers rebounded notably last week with 10 districts/regions recording sales of over 10,000 square meters each and new supply surging to the second highest weekly volume year-to-date," said Lu Wenxi, Centaline's senior researcher. "That would be enough to support sales for the next two weeks so we remain optimistic about September's overall performance."

About 343,000 square meters of new residential properties spanning 13 projects were released into the local market last week, compared with some 134,000 square meters during the previous seven-day period, according to Centaline data.

The average new home price, meanwhile, dropped 15 percent week over week to 51,966 yuan (US$7,668) per square meter, with three projects on the top 10 list costing less than 30,000 yuan per square meter.

A development in Nanhui sold 28,984 square meters, or 314 apartments, for an average price of 22,115 yuan per square meter, exceeding all others during the period. It was trailed by a project in Pudong which unloaded 15,299 square meters, or 157 units, at an average cost of 23,929 yuan per square meter.

One luxury project made its way onto the weekly list, ranking No.8 after selling 29 units for an average price of 110,600 yuan square meter, Centaline data showed.