Shanghai new home market remains lackluster

By Cherry Cao | January 26, 2015, Monday |

Online Edition

BUYING sentiment among home seekers remained sluggish in Shanghai for the third consecutive week despite an insignificant rebound, latest market data suggest.

The purchases of new residential properties, excluding government-subsidized affordable housing, rose 16.2 percent to 175,400 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said in a report released today. New homes were sold for an average price of 29,518 yuan (US$4,760) per square meter, a week-over-week drop of 5.5 percent.

"Despite the growth, the weekly transaction volume of new houses remained below the 200,000-square-meter threshold for three straight weeks, indicating 'wait-and-see' momentum among buyers, particularly those looking for medium- to low-end apartments, began to prevail," said Lu Qilin, a Deovolente researcher. "In contrast, up-scale housing products still seemed to be popular among affluent buyers during the same period of time, kind of bucking the overall trend."

Across the city, 101 new luxury homes costing 50,000 yuan per square meter and above were sold last week, a week-on-week increase of 14 units. Notably, an apartment at Shanghai Arch, a high-end project in Pudong developed by Sun Hung Kai Properties, was sold for a total price of 57.8 million yuan, or 167,399 yuan per square meter on average, the most costly registered last week, Deovolente data showed.

On the supply side, meanwhile, new homes totaling 241,600 square meters were released to the local market last week, a weekly surge of 272.6 percent, according to Deovolente.

"Slack sentiment started to dominate the local housing market since the beginning of this year, putting an end to a strong rally registered in the last month of 2014," said Huang Zhijian, chief analyst at Shanghai Uwin Real Estate Information Services Co. "Real estate developers should be careful about their sales strategy as inventory of new homes still remains at a high level while momentum among home buyers is somewhat fading as the Spring Festival is approaching."

According to Uwin data, new home purchases in Shanghai totaled 555,300 square meters during the first 25 days of January.

Real Estate

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Shanghai new home market remains lackluster

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