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Second-hand apartment sales remain sluggish

A SLUGGISH approach to buying used apartments continued to dominate the local market for a sixth consecutive month producing only "stagnant" sales.

Shanghai's second-hand housing index, which monitors the prices of existing homes in 52 areas across the city, lost 19 points, or 0.79 percent, to 2,297 last month, the index compiler's office said yesterday.

The southward trend first occurred in August last year, putting an end to a 22-month rally of the market since October 2006. It declined 0.45 percent, 1.07 percent, 0.91 percent, 0.82 percent and 0.15 percent, respectively, between August and December.

"The weeks before and after the Spring Festival are traditionally periods of low enthusiasm for home purchasing," commented Chi Shengyu, an analyst at the index compiler's office. "Our research has found that the transaction volume of used homes dropped about 35 percent in January from a month earlier and prices in 45 areas, or 86 percent, retreated during the period at an average 1.07 percent."

Five prime districts suffered setbacks last month with an average decrease of 1.02 percent, the compiler said. Among them, Huangpu District led the decline with a 1.55-percent plunge, followed by the districts of Luwan, Jing'an, Xuhui and Changning, which dropped 1.11 percent, 1 percent, 0.86 percent and 0.59 percent, respectively.

New homes introduced to the market with major price cuts helped drag down the price of second-hand homes in the same area, analysts said. Across the city, Jinqiao in Pudong registered the biggest tumble of 2.28 percent in all 52 areas monitored by the index compiler, immediately followed by Luoshan in Pudong, Daning in Zhabei and Kongjiang in Yangpu, which all lost more than 2 percent as compared to December.

Separately, the local rental index, also released by the index compiler, dipped for a fourth consecutive month last month, closing 10 points, or 0.8 percent, lower at 1,204.

Demand for high-end apartments, usually asking more than 6,000 yuan (US$877) for a two-bedroom unit, fell the most last month in Lujiazui and Xintiandi, with rents in the two areas dropping 3.5 percent and 3.3 percent, respectively. Rents for mid-class properties and low-end apartments lost 0.5 percent and 0.9 percent, respectively.


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