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November 2, 2016

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Home » Business » Real Estate

Sentiment weakens for new homes

SENTIMENT among both home buyers and real estate developers dimmed sharply in Shanghai in October as government measures proved effective in cooling the overheated market.

The area of new homes sold, excluding government-funded affordable housing, fell 16.3 percent from September to 869,000 square meters, the lowest in eight months, Shanghai Centaline Property Consultants Co said in a report released yesterday. But on a year-on-year basis, the figure marked a 42.5 percent plunge.

Only 299,000 square meters of new houses were released locally in October, a month-on-month drop of 56.2 percent and a year-on-year dive of 82.8 percent, according to Centaline data.

“This monthly supply is a record low for Shanghai since the city introduced the online registration requirement for property sales,” said Lu Wenxi, senior manager of research at Centaline.

“High-profile promotional sales campaigns became rare too as tightening moves implemented in more than 20 domestic cities and mostly over the past month are making real estate companies more cautious.”

On October 8, Shanghai announced measures including increasing land supply and strengthening supervision of capital to cool its red-hot property market, following the steps of some of its domestic counterpart cities where home prices have surged rapidly. Sources of funding for land purchases will be regulated and supervision over new home prices will be strictly monitored while property market information will be released regularly to stabilize the market, according to the local housing authority.

New homes were sold last month at an average 43,838 yuan (US$6,475) per square meter, down 2.2 percent from September but the price was a surge of 31.7 percent from the same period a year earlier.

Fewer expensive houses were launched locally due to stricter implementation of pre-sale approval and registration for new home releases.

A total of 413 houses priced at 80,000 yuan per square meter and above were sold in Shanghai last month, a monthly drop of 28.2 percent, while new homes costing 30,000 yuan per square meter and below fell 10.8 percent, the data showed.


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