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Home prices remain high in Shanghai

TRANSACTION of existing homes rose to a four-month high in Shanghai in July while average cost further extended its upward trajectory as land market fever continued to boost buyers' sentiment.

Some 34,400 units of pre-occupied houses were sold across the city last month, an increase of 29.2 percent from June, Shanghai Homelink Real Estate Agency Co said in a report released today.

Average price of these pre-owned houses, meanwhile, edged up 0.43 percent month over month to a record 28,200 yuan (US$4,233) per square meter.

"A red-hot land market since May has changed home-seekers' expectations a lot, accelerating their paces to enter the market in fear that home prices would rise too fast to catch up," said Lu Qilin, director of research at Shanghai Homelink. "If such robust sentiment maintains, the local housing market will very likely turn overheated again in September and October which is the traditional high season for property sales."

Notably, areas where land auctions made media headlines registered stronger sales compared to other counterparts.

For instance, outlying Zhoukang in Pudong New Area and Sijing in Songjiang District both recorded notable increases in inquiries from home seekers while individual owners in those areas also raised their asking prices by about 5 percent, according to Lu Wenxi, a senior research manager at Shanghai Centaline Property Consultants Co.

"Strong momentum is expected to extend through August when quite a few land plots with better urban locations are scheduled to be released for bidding," Lu predicted.

Shanghai’s existing housing index, which monitors monthly price changes across 130 areas in the city, climbed 2.57 percent from a month earlier to 3,784 in July, the Shanghai Existing House Index Office said in a latest report. That compared to June's 1.55 percent gain.

More than 85 percent of the 130 areas registered month-over-month price growth, the office said.


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