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City home sales drop on tightening policy

By Cherry Cao | November 18, 2013, Monday | Online Edition

NEW home purchases in Shanghai fell below the 300,000-square-meter threshold for the first time in six weeks amid eased sentiment among buyers, latest market data showed.

The sales of new residential properties, excluding government-subsidized affordable housing, dropped 36.2 percent from a week earlier to 259,400 square meters during the seven-day period that ended Sunday, Shanghai Deovolente Realty Co said in a report released today. They were sold for an average 24,779 yuan (US$4,062) per square meter, a weekly increase of 1.5 percent.

Supply also suffered a week-over-week decline of 55.3 percent to 220,700 square meters during the period, the lowest in nine weeks, according to Deovolente data.

"Following robust sales registered over the past few weeks, the market finally cooled down, a reflection of somewhat eased sentiment," said Lu Qilin, a Deovolente researcher. "The latest curbs implemented by the local government, meanwhile, may also help trigger some wait-and-see sentiment among potential buyers."

Shanghai issued a batch of new tightening policies on November 8 as it continued its fight against rising home prices.

The city joined Shenzhen in raising the minimum down payment to 70 percent from the previous 60 percent for second-home buyers and also required non-local households to provide a tax or social insurance certificate to prove their residence in Shanghai for a cumulative 24 months over the past three years. Previously, a tax or social insurance certificate to prove residence for a cumulative 12 months over the past two years was needed to get non-locals qualified for one property purchase.

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