Shanghai’s housing market cools in October

By Cherry Cao | November 1, 2016, Tuesday |

Online Edition

SENTIMENT among both home buyers and real estate developers dropped significantly in Shanghai last month as government vows to curb speculation and cool down the overheated market proved to be effective.

The area of new residential properties 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 today. That, however, represented a year-over-year plunge of 42.5 percent.

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

"This amount of 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. "Promotional sales campaigns, which used to be conducted in a high-profile approach by many developers, 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 while making their release plans."

Shanghai announced on October 8 a set of measures including increasing land supply and strengthening supervision of capital to cool down its red-hot property market, following the steps of some of its domestic counterparts which also registered rapidly surging home prices. Funding sources for land purchases will be regulated and stricter supervision over new home prices will be implemented while authoritative property market information will also be released on a regular basis to stablize market expectations, according to the local housing authority.

By average price, new houses sold last month cost an average 43,838 yuan (US$6,457) per square meter, a fall of 2.2 percent from September but still an increase of 31.7 percent from same period a year earlier.

Fewer high-end products were launched locally as a result of stricter implementation of pre-sale approval and registration for new home releases.

For instance, a total of 413 housing units carrying a price tag of 80,000 yuan per square meter and above were sold in Shanghai last month, a monthly drop of 28.2 percent. That compared to a 10.8-percent decrease for new residential properties in the 30,000 yuan per square meter and below category, Centaline data showed.

Citywide, a development in Lingang New City, a suburban port area in Nanhui, recorded sales of 408 units, topping all residential projects last month.

Real Estate

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Shanghai’s housing market cools in October

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