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November 2, 2018

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New home sales in retreat, but prices gain

SHANGHAI’S new home market continued a notable retreat in sales last month despite an increase in new supply, the latest industry data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 23.1 percent from September to around 537,000 square meters in October, Shanghai Centaline Property Consultants Co said in a report yesterday.

“On one hand, the seven-day National Day holiday at the beginning of October partly affected the sentiment among buyers,” said Lu Wenxi, a senior research manager at Centaline.

“On the other hand, as first-time home buyers who can only afford medium- to low-priced units still remain a driving force of the local market, it’s no surprise to see the double-digit withdrawal.”

The average cost of a new home, however, jumped 17.3 percent from a month earlier to a record 63,430 yuan (US$9,131) per square meter, mainly due to comparatively robust sales in the medium- to high-end segments, according to the Centaline data.

Six of the 10 best-selling residential developments in October cost more than 80,000 yuan per square meter. The most popular project, in Sanlin in the Pudong New Area, managed to sell 34,827 square meters, or 382 apartments, for an average price of 81,727 yuan per square meter. One project in downtown Jing’an District, with a price tag of 128,832 yuan per square meter, ranked No. 8 in last month’s list after unloading 49 units.

A total of 927,000 square meters of new residential properties spanning 27 projects were launched into the market for sale last month, a rise of 24.7 percent from September, according to Centaline.

“As new supply has been outnumbering sales notably in Shanghai’s new housing market over the past few months, the local inventory of new homes continued to rise, thus leaving ever-growing pressure on real estate developers,” said Zhao Baogen, an analyst at Shanghai Homelink Real Estate Agency Co.

“For the last two months of 2018, we should expect some price cuts in some developments, not only in outlying areas of the city but some downtown locations as well.”

As of October, there are about 42,900 new homes available on the local market, compared with about 35,900 at the end of June, according to data released yesterday by Homelink.


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