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August 4, 2009

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Home » Business » Real Estate

New home prices soar again

NEW home prices continued to soar in Shanghai in July for the fifth consecutive month.

The average price of new homes, excluding those designated for residents relocated for urban redevelopment projects, rose 1.6 percent to 15,770 yuan (US$2,308) per square meter, the highest since June 2008, Shanghai Uwin Real Estate Information Services Co said yesterday.

Sales of new homes, however, fell 5.4 percent to 1.94 million square meters in July and ended a five-month rally since February.

"The rising prices coupled with falling volume are probably a sign of decreasing affordability,'' said Lu Qilin, a researcher at Shanghai Uwin. "The monthly transaction volume may plunge if prices continue to go north.''

An inadequate supply was another reason behind the volume drop, Uwin data showed.

A total of 1.27 million square meters of new homes were introduced to the market in July, down 5.2 percent month on month.

The supply of new homes in the first half of July was affected by safety checks the city government imposed on buildings under construction citywide after the deadly collapse of an apartment block in Minhang District on June 27, industry analysts said earlier.

While the overall volume fell, the mid to high-end properties became even more popular among home buyers over the past month.

Across the city, about 2,000 units of new houses costing between 2 million yuan and 3 million yuan were sold in July, up 9 percent from June. Meanwhile, around 362 deals involving new homes costing more than 8 million yuan were done, a month-on-month rise of 8 percent, said Shanghai Yungching Realty Inc.

The city's existing-home market also suffered last month when the transaction volume fell about 10 percent from June after rising prices drenched buyers' interest, a real estate chain has said.


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