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Shanghai’s housing market cools down

SHANGHAI'S residential sales market embraced a clear sign of cooling down last week while sentiment retreated among both home seekers and real estate developers as government moves to tame the overheated market.

The area of new homes sold, excluding government-funded affordable housing, fell 6.8 percent from the previous week to 219,000 square meters, Shanghai Centaline Property Consultants Co said in a report released today.

Outlying areas continued to be the best performers with Nanhui in Pudong New Area, registering outstanding sales of some 55,000 square meters alone during the seven-day period, mainly fuelled by two projects where a combined 358 apartments were sold.

Average cost of new houses plunged 9.1 percent from the previous week to 40,563 yuan (US$5,975) per square meter due to strong sales of rurally located developments, the lowest weekly data since August, according to Centaline research.

On the supply side, not a single apartment or house was launched onto the local market last week, very rare for October which is often considered a high season for property sales.

"Wait-and-see sentiment started to prevail in the city's housing market as further tightening measures by the government to fight against soaring home prices and curb property bubbles are changing the mind of some prospective buyers," said Lu Wenxi, senior manager of research at Centaline.

"Transaction volume will likely shed further as home purchase restrictions as well as strict mortgage policies will be both strictly implemented to dampen speculative demand," Lu said.

The pace of the growth in new home prices in 15 major Chinese cities slowed notably, or even fell, in the first half of this month compared with September, the National Bureau of Statistics said last Friday.

In Shanghai, new home prices climbed 0.7 percent for the first half of October, moderating from the 3.2 percent gain seen in September.


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