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Solid demand fuels sales of new homes

THE volume of new houses sold across Shanghai last week hit an 84-week high following strong home buying sentiment ignited by two real estate fairs held during the May Day holiday.

A total of 512,600 square meters of new homes, excluding those built for relocation uses, were sold in the city between May 4 and 10, an increase of 30 percent from a week earlier, according to statistics released yesterday by E-House (China) Holdings Ltd.

"That was the highest since October 2007, and we expect such sales boom to continue for another few weeks," said Xue Jianxiong, an E-House analyst. "However, it might start to drop as early as next month because recent price increases by real estate developers could deter some buyers while at the same time, summer, the traditional slack season for home sales, is approaching."

The local supply of new homes jumped 60 percent last week to 340,200 square meters while the average selling prices of new houses remained little changed during the same period, E-House statistics showed.

"The two real estate fairs held in the city between May 1 and 4 did help spark market sentiment over the past week," said Lu Qilin, deputy head of research at Shanghai Uwin Real Estate Information Services Co. "Both new home prices and volume of space will likely remain at rather high levels through the end of this month."

More than 170,000 people visited the Shanghai Exhibition Center for the four-day event, up from only 80,000 visitors last year. About 1.92 billion yuan worth of deals, including agreements of intention, were sealed during the fair which had some 200 exhibitors. But only 550 million yuan of deals were won a year earlier.

The smaller fair in Pudong New Area saw 285 units of homes booked.

Sales of new homes hit 1.89 million square meters in Shanghai last month against 1.5 million square meters in March and 787,600 square meters in February, Uwin data showed.


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