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Less trading of Shanghai’s existing homes in October

SHANGHAI'S existing home market lost some of its sheen last month as tightening measures to curb speculation continued to take effect and wait-and-see sentiment became prevalent among home seekers.

Citywide, about 22,566 units of pre-occupied houses changed hands in October, a month-over-month plunge of 32.6 percent, according to data compiled by Shanghai Centaline Property Consultants Co.

"The latest rein-in efforts introduced by the government in October immediately damped market momentum and in particular, changed prospects of many potential buyers," said Lu Wenxi, a senior manager of research at Centaline. "As such measures remained in place, the monthly transaction volume of existing homes finally returned to a normal range of about 20,000 units."

On October 8, Shanghai announced a series of measures that mainly included raising land supply and strengthening supervision of funding sources for land purchases, the second major effort made by the local government so far this year to curb speculative property purchases.

These pre-used homes were sold for 36,276 yuan (US$5,250) per square meter on average, an increase of 13.1 percent from September and also the highest monthly data registered so far this year.

The double-digit growth in average price was mainly a result of structural shift, Centaline research showed. Sales in a sector whose home prices start at 8 million yuan totaled 1,115 units in Shanghai last month, just an insignificant retreat from 1,185 units registered in September when overall purchases of existing homes stood at 33,493 units.

For the rest two months, transaction volume of existing houses should hover around the current level and more individual home owners shall be willing to sell their properties at some discounts, probably between 3 and 5 percent, Lu predicted.


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