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December 2, 2016

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Home » Business » Real Estate

New home sales fall to 21-month low

SHANGHAI’S new housing market fell for the third straight month amid a wait-and-see attitude among buyers, although the average price again broke records.

The area of new homes sold, excluding government-funded affordable housing, plunged 30.6 percent from October to 603,000 square meters — a 21-month low for Shanghai — in November, Shanghai Centaline Property Consultants Co said in a report yesterday. On an annual basis, the drop is 59.7 percent.

“The October 8 tightening measures, including increasing land supply and strengthening supervision of capital, continued to impact potential buyers’ prospects,” said Lu Wenxi, senior manager of research at Centaline.

“The transaction volume fell to a 21-month low for Shanghai, and the market will cool further with the latest introduction of tightened credit policies.”

New homes sold for an average 46,423 yuan (US$6,745) per square meter in November, an all-time monthly high for Shanghai and a gain of 5.9 percent from October, Centaline data showed.

Sales of 271 homes costing 100,000 yuan per square meter and above were concluded last month in the city, a month-on-month rise of 52.2 percent.

Three out of the city’s 10 best-selling housing projects were sold for above 100,000 yuan per square meter.

Real estate developers were also suffering from a lackluster sentiment. Last month, 188,000 square meters of new homes were released to the local market, down 37.1 percent from October.

Late on Monday, Shanghai’s city government dealt a third major blow this year to cool the city’s overheated housing market with tighter mortgage policies, a move that most analysts believed might “freeze” the market. Effective on Tuesday, buyers of first homes have to pay a minimum 35 percent down payment, up from 30 percent. Second-time buyers, who have owned a house in the city or have no house now but have applied for mortgage loans from either commercial banks or public housing funds anywhere in the country, have to pay a minimum 70 percent down payment if the property is defined as a “non-normal” home, and a minimum 50 percent if the house is classified as “normal.”


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