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Shanghai’s property market boils due to possible tightening

NEW home buying sentiment surged in Shanghai last week amid speculation of further tightening measures by the government to cool down the market.

The area of new residential properties sold, excluding government-subsidized affordable housing, soared 93 percent to 555,700 square meters, the highest seven-day volume in about five months, Shanghai Homelink Real Estate Agency Co said in a report released today.

“Home buyers thronged property trading centers all around the city to have their purchase deals sealed before a new round of rein-in measures are introduced by the city government,” said Ke Xiaojuan, a researcher at Homelink. “Robust momentum in the high-end and luxury segments in particular pushed the average price of new homes to a record again.”

New homes cost an average 43,571 yuan (US$6,511)per square meter last week, a week-over-week rise of 5.6 percent, Homelink data showed.

Further tightening policies may include increased down payment requirements for both first and second home buyers as well as a 10 percent hike in interest rate for certain buyers, according to earlier media reports.

Citywide, while outlying areas such as Qingpu, Pudong and Songjiang continued to lead others in transaction volume, high-end and luxury projects performed extremely well with three of the 10 most popular developments costing more than 70,000 yuan per square meter. In the 80,000-yuan-per-square-meter and above category, a total of 479 such units were sold in Shanghai last week, a surge of 320 units from the previous seven-day period, according to Homelink data.

Supply, however, continued to be sluggish. New houses totaling 83,000 square meters were released to the local market, a drop of 19.9 percent from the previous week.


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