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Housing market stays strong as demand continues to rise

THE housing market remained generally strong in Shanghai in the first half of this month as demand continued to rise.

Sales of new homes, excluding those designated for relocation, reached 739,011 square meters during the first 15 days, an increase of 41 percent compared to the same period a month earlier, Shanghai Uwin Real Estate Information Services Co said yesterday.

Average selling prices, however, remained little changed at 12,365 yuan (US$1,810) per square meter.

"Demand from end-users seemed to remain robust over the past two weeks and the sales boom may extend further into June as July and August are traditionally the off-peak months for home sales due to the hot weather," said Gu Aihua, a Uwin analyst.

More apartments in prime locations had been sold during the period though the majority of deals were between the city's Middle and Outer Ring Roads.

Uwin's research found that 444 units, or 64,191 square meters, of new homes within the Inner Ring Road were sold in the first half of the month at an average of 28,369 yuan per square meter, compared to 280 units, or 38,871 square meters at an average of 25,881 yuan a month earlier.

After more than six months of sluggish sales, the city's new-home market began to pick up in February when a total of 787,600 square meters of new homes were sold, a month-on-month increase of 60 percent. It then hit a 16-month high in March with total transactions of more than 1.5 million square meters, mainly due to a drop in prices.

In the second-hand market, transaction volume fell slightly though the general momentum still remained strong. Latest research by Century 21 China Real Estate found that sold area was down 6 percent from the month before amid decreasing supply as well as higher prices.

"It takes longer now for a deal to be reached as supply is running short and more home owners are prone to raise prices following the sales boom over the past two months," said Century 21's Huang Hetao.

Shanghai Centaline Property Consultants Ltd also said transaction volume had dropped this month with 50 percent fewer used apartments for sale in some areas at higher prices.


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