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Shanghai’s home sales plunges to a 5-year low

WAIT-AND-SEE sentiment continued to prevail in the local housing market with April home sales hitting the lowest in five years, latest industrial data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 8.8 percent from March to about 677,000 square meters last month, a year-on-year drop of 30.3 percent and the lowest April data since 2013, Shanghai Centaline Property Consultants Co said in a report released today.

"Buying momentum remained subdued following weak performance in March which used to be a traditional month for notable recovery in home sales," said Lu Wenxi, senior manager of research at Centaline. "By product, medium- to low-end houses in remote areas remained the most popular among by home seekers with strictly implemented tightening measures continually in place."

The new homes sold at an average cost of 46,949 yuan (US$6,808) per square meter, a month-over-month dip of 1.1 percent, according to Centaline data.

Citywide, a residential project in outlying Fengxian District outperformed all with seven-day sales totaling 25,628 square meters, or 220 units, at an average price of 18,015 yuan per square meter. Three of the 10 best-selling projects cost less than 30,000 yuan per square meter while the most expensive development asked for no more than 68,000 yuan per square meter.

On the supply side, some 573,000 square meters of new houses, majority of which in remote areas, were released to the local market, a surge of 58.7 percent from the previous week.

"This trend will probably extend for another one or two months with government maintaining its strict control in issuing sales permit for high-end developments," Lu said. "For developers, the best way to boost sales is to offer buyers' some price discounts, as such tactics always work well in markets like Shanghai where accommodation demand from both first-time buyers and upgraders remains strong."


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