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Policy-driven retreat of home sales in Shanghai
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NEW home purchases in Shanghai fell for the second consecutive week as tightening policies continued to rein in sentiment among buyers.
The area of new residential properties sold, excluding government-funded affordable housing, dropped 36.6 percent to 180,000 square meters last week, Shanghai Centaline Property Consultants Ltd said in a report released today.
The average cost of new homes shed 13.3 percent to 28,533 yuan (US$4,405) per square meter, as medium to low-end products remained the most sought after among home seekers.
"The seven-day transaction volume fell below the 200,000-square-meter threshold while average cost retreated below 30,000-yuan-per-square-meter for the first time since September 2015 as tightening measures continued to take effect to damp buyers' momentum," said Lu Wenxi, a senior manager of research at Centaline. "There was also a significant withdrawal in new home supply as most developers chose to sit on the sideline for a while."
The city's top three best-selling projects all cost no more than 20,000 yuan per square meter while more than 53 percent of total new homes sold last week were priced at less than 25,000 yuan per square meter, an increase of 7.9 percentage points from the previous week, according to Centaline data.
"The structural shift helped drag down the average price to a comparatively 'normal' level and that might somehow help stablize the overall market momentum," Lu added. "Looking forward, the currently robust sentiment in the medium to low-end segment will subside in the next couple of weeks and buyers' interest in the high-end and luxury houses is supposed to cool further so transaction volume will probably keep going southward."
Around the city, some 108,000 square meters of new residential properties, majority of which medium to low-end developments, were released to the market last week, a week-over-week plunge of 75 percent, Centaline data showed.
Shanghai on March 25 announced a batch of tightening measures to cool the city's overheated housing market which mainly included increased down payment requirement for second homes and raised threshold for non-locals to purchase a house.
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