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New home sales rise to 6-week high, though easing predicted

By Cherry Cao | November 11, 2013, Monday | Online Edition

NEW home sales rose to a six-week high in Shanghai with the mid- to low-end segment seeing robust sentiment, the latest market data showed.

The purchases of new residential properties, excluding government-subsidized affordable housing, jumped 8.2 percent week on week to 406,600 square meters during the seven-day period ended on Sunday, Shanghai Deovolente Realty Co said in a report released today.

“It’s a little bit surprising to see the weekly volume exceed the 400,000-square-meter threshold in early November following strong home sales registered in September and October,” said Lu Qilin, a Deovolente researcher. “Notably, mid- to low-end projects seemed very popular among home buyers.”

The average cost of a new home fell 4.4 percent to 24,405 yuan (US$4,000) per square meter in Shanghai last week, the first time in four weeks to fall below the 25,000-yuan-per-square-meter threshold, Deovolente data showed. Of the city’s 10 best-selling projects, half were sold at a price of less than 20,000 yuan per square meter.

On the supply side, 493,200 square meters of new homes were released to the local market last week, a week over week increase of 16.8 percent.

“The local government issued last week a batch of new tightening policies in its latest effort to cool down the overheated market which mainly included raised down payments for second home buyers and a higher threshold for non-locals to get qualified for home purchase in Shanghai,” said Huang Zhijian, chief analyst at Shanghai Uwin Real Estate Information Services Co.

“Therefore, the current strong momentum may probably ease over the next couple of weeks.”

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