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New home sales forecast to drop 70%
By Cao Qian |
May 28, 2010, Friday
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Online Edition
Online Edition
NEW home sales in Shanghai might drop 70 percent in May from a month earlier as most real estate developers remain reluctant to slash prices amid uncertainties.
Sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, totaled 258,000 square meters in the first 27 days of this year, Shanghai Uwin Real Estate Information Services Co said today.
"For the whole month, the figure should be around 300,000 square meters and that could be a plunge from a month earlier when 1.02 million square meters of new houses were sold across the city," said Lu Qilin, a researcher at Shanghai Uwin.
"On the supply side, more than 850,000 square meters' new housing were introduced for sale this month, compared to 1.23 million square meters in April."
In mid April the central government increased the downpayment ratio and mortgage interest rates for second homes, which has cut sales in new and existing markets over the past few weeks. However, home prices in the city still remain at rather high levels as no massive, significant setbacks have been detected so far.
"Real estate developers are still waiting for detailed local guidelines because it's hard to decide whether they should cut prices or what discounts they should offer until they receive clearer signals from the government," said Sky Xue, an analyst with China Real Estate Information Corporation, a leading real estate information, consulting and online services provider.
"At the moment, only a few developers have started to cut their prices, mainly in the city's outlying areas."
In the latest example, a residential project in Gucun, Baoshan District, is now offering discounts of up to 25 percent from six months earlier to lure buyers, industry analysts said.
Sales of new homes, excluding those designated for relocated residents under urban redevelopment plans, totaled 258,000 square meters in the first 27 days of this year, Shanghai Uwin Real Estate Information Services Co said today.
"For the whole month, the figure should be around 300,000 square meters and that could be a plunge from a month earlier when 1.02 million square meters of new houses were sold across the city," said Lu Qilin, a researcher at Shanghai Uwin.
"On the supply side, more than 850,000 square meters' new housing were introduced for sale this month, compared to 1.23 million square meters in April."
In mid April the central government increased the downpayment ratio and mortgage interest rates for second homes, which has cut sales in new and existing markets over the past few weeks. However, home prices in the city still remain at rather high levels as no massive, significant setbacks have been detected so far.
"Real estate developers are still waiting for detailed local guidelines because it's hard to decide whether they should cut prices or what discounts they should offer until they receive clearer signals from the government," said Sky Xue, an analyst with China Real Estate Information Corporation, a leading real estate information, consulting and online services provider.
"At the moment, only a few developers have started to cut their prices, mainly in the city's outlying areas."
In the latest example, a residential project in Gucun, Baoshan District, is now offering discounts of up to 25 percent from six months earlier to lure buyers, industry analysts said.
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