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Shanghai’s property market weakens again albeit more supply

By Cherry Cao | 15:39 UTC+8 July 10, 2017 | Online Edition

SALES of new residential properties fell in Shanghai last week despite record supply with medium- to low-end apartments being most sought after among buyers.

The area of new homes sold, excluding government-subsidized affordable housing, plunged 42.7 percent to 138,000 square meters during the seven-day period ended Sunday, Shanghai Centaline Property Consultants Co said in a report released today. These new homes cost an average 45,160 yuan (US$6,623) per square meter, a week-over-week decrease of 6.2 percent due to a structural shift toward products mainly for first-time buyers.

Across the city, new built houses in outlying areas attracted the most buyers. Nanhui in Pudong New Area led all with weekly transaction in the area hitting 38,000 square meters, a rise of 11.8 percent from the previous week. Jiading and Qingpu districts trailed, recording 21,000 square meters and 17,000 square meters, respectively, of sales, according to Centaline data.

By project, a residential development in Lingang port area recorded sales of 196 apartments at an average price of 29,373 yuan per square meter, making it the most popular project during the week.

"Average daily transaction volume of less than 20,000 square meters during the weekend period was somewhat equivalent to the low level we would usually see during the Spring Festival holiday, indicating truely sluggish momentum that could be even worsened by hot weathers," said Lu Wenxi, senior manager of research at Shanghai Centaline. "On the other hand, a significant rebound in new home supply during the same period should reflect ever-growing pressure that some real estate developers have been facing to unload inventories and replenish cash as tightening policies, which have remained strictly enforced for quite a long period of time, kept damping buyers' home purchase interest."

About 318,000 square meters of new residential properties across 10 projects were released to the city, a week-over-week surge of 55.1 percent. That was the highest seven-day volume recorded so far this year, Centaline said.

Despite abundant supply, no major recovery should be expected in the coming few weeks as the hottest season in a year has just kicked off, Lu said.

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