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May 4, 2016

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Shanghai’s housing sector cools

SALES of new homes plunged in Shanghai last month as the local government’s tightening measures to cool the overheated market proved effective.

The area of new homes sold, excluding government-funded affordable housing, dived 56.1 percent from March to 972,000 square meters in April, Shanghai Centaline Property Consultants Ltd said in a report released yesterday.

“The latest batch of rein-in measures has left an immediate impact on the local housing market since its implementation became effective on March 25,” said Lu Wenxi, senior research manager at Shanghai Centaline. “Buyers’ interest has been seriously damped with medium to high-end segments suffering the most notable setback.”

Around 122,000 square meters of new homes costing 50,000 yuan (US$7,710) per square meter and above were sold last month, accounting for 12.6 percent of the city’s total, down 3.5 percentage points from March, according to data compiled by Centaline.

Meanwhile, new homes sold last month cost an average 32,636 yuan per square meter, a monthly drop of 1.3 percent. Also, tightening policies, including a higher minimum down payment for second-home buyers and a higher eligibility threshold for non-local residents to buy a house, prompted real estate developers to launch more units to boost sales. More than 1.13 million square meters of new homes were released locally for sale in April, up 31.3 percent from March, Centaline data showed.

Nationwide, a separate report released earlier by the China Index Academy showed that home prices continued to rise in April at a slower pace.

The average cost of a new home gained 1.45 percent from a month earlier to 11,467 yuan per square meter, slowing from a 1.9 percent gain in March, said the academy, which tracked activities in 100 Chinese cities.

Home prices rose in 71 cities, fell in 25 cities and were flat in the remaining four cities.


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