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New home deals sink 50% in city but average prices soar
By Cao Qian |
April 27, 2010, Tuesday
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Print Edition
Print Edition
NEW home transactions halved in Shanghai last week amid a growing "wait-and-see" sentiment among buyers of mass-market houses while average prices continued to break records due to robust sales of high-end houses.
The sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, dived 50 percent to around 170,000 square meters between April 19 and 25, according to Shanghai Uwin Real Estate Information Services Co and China Real Estate Information Corp which released their research yesterday. The average prices soared to a record 26,096 yuan (US$3,820) per square meter during the same period, a weekly gain of more than 10 percent, the two companies said.
"The latest batch of policies launched by the central government since mid April, which aimed to curb property speculation, has left a great impact on the city's mid- to low-end housing market over the past week," said Lu Qilin, a researcher at Uwin. "However, its influence on the high-end sector seemed rather limited because buyers of the expensive homes are usually cash-affluent."
Only about 70,000 square meters of new homes which cost less than 20,000 yuan per square meter were sold across the city last week, a drop of 60 percent from a week earlier. The transaction volume of houses costing more than 50,000 yuan per square meter rose 5 percent from the week before, Uwin data showed.
The Bank of China last Friday became the first major Chinese bank to implement stricter mortgage policies when it said it will in principle stop loans to buyers of third or more homes and also review interest rates of existing mortgages - 15 percent discount on first homes, 1.1 times on second homes and 1.2 times on third homes - when current contracts stipulating the rates expire.
China on April 15 raised the downpayment requirement on second-home mortgages to at least 50 percent from 40 percent and reiterated an extra 10 percent should be levied on interest rates on loans for these homes. Two days later, the State Council issued a notice that banks can suspend loans to buyers of third or more homes in places where house prices rise too high and home supply is insufficient.
The sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, dived 50 percent to around 170,000 square meters between April 19 and 25, according to Shanghai Uwin Real Estate Information Services Co and China Real Estate Information Corp which released their research yesterday. The average prices soared to a record 26,096 yuan (US$3,820) per square meter during the same period, a weekly gain of more than 10 percent, the two companies said.
"The latest batch of policies launched by the central government since mid April, which aimed to curb property speculation, has left a great impact on the city's mid- to low-end housing market over the past week," said Lu Qilin, a researcher at Uwin. "However, its influence on the high-end sector seemed rather limited because buyers of the expensive homes are usually cash-affluent."
Only about 70,000 square meters of new homes which cost less than 20,000 yuan per square meter were sold across the city last week, a drop of 60 percent from a week earlier. The transaction volume of houses costing more than 50,000 yuan per square meter rose 5 percent from the week before, Uwin data showed.
The Bank of China last Friday became the first major Chinese bank to implement stricter mortgage policies when it said it will in principle stop loans to buyers of third or more homes and also review interest rates of existing mortgages - 15 percent discount on first homes, 1.1 times on second homes and 1.2 times on third homes - when current contracts stipulating the rates expire.
China on April 15 raised the downpayment requirement on second-home mortgages to at least 50 percent from 40 percent and reiterated an extra 10 percent should be levied on interest rates on loans for these homes. Two days later, the State Council issued a notice that banks can suspend loans to buyers of third or more homes in places where house prices rise too high and home supply is insufficient.
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