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Shanghai’s new home market is yet to recover

NEW home purchases in Shanghai dropped for the first time in five weeks while momentum among real estate developers also retreated, giving evidence that the market was yet to embrace a major recovery.

The area of new residential properties sold, excluding government-subsidized affordable housing, fell 6.2 percent to 121,000 square meters last week, Shanghai Centaline Property Consultants Co said in a report released today.

Buying sentiment for new homes in the city's outlying districts of Qingpu and Jiading was the most robust with seven-day transaction totaling 21,000 square meters and 20,000 square meters, respectively, Centaline data showed.

"After a four-week rally, the local housing market suffered a retreat in probably all aspects as cautious sentiment continued to dominate," said Lu Wenxi, senior manager of research at Centaline. "Notably, none of the project in the top 10 list cost more than 60,000 yuan (US$8,666) per square meter and the best-selling development just registered 100 units during the seven-day period."

The average cost of new homes sold last stayed at 45,393 yuan per square meter, a week-over-week decrease of 6.1 percent.

Around the city, a residential development in Jiading recorded the most robust sales with 100 apartments at an average price of 31,406 yuan per square meter. It was most closely followed by a project in even remoter Fengxian, where 75 units were sold for 19,108 yuan per square meter on average, according to Centaline data.

Sluggish sentiment was also found among real estate developers.

Citywide, some 67,000 square meters of new houses were released across the city last week, a week-over-week plunge of 55 percent. Medium to low-end projects continued to dominate the market with majority of the new supply costing around 40,000 yuan per square meter or below.


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