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Shanghai's new home sales rally
Aggregated Source: Shanghai Daily: Business

NEW home sales in Shanghai rebounded and average prices fell last week as more units hit the market, mostly in outlying areas.

Purchases of new residential properties, excluding government-subsidized affordable housing, jumped 20 percent to 215,900 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said yesterday.

The average price of a new home, meanwhile, fell 11 percent from the previous week to 21,849 yuan (US$3,5424) per square meter, with 57 percent of units selling at 20,000 yuan or less a square meter. That compares with 53.2 percent in the prior week.

Availability of homes increased. More than 382,000 square meters of new homes were released to the local market, a week-over-week surge of 43 percent.

"Supply exceeded sales for the fourth straight week, but we could still see prices rising in a couple of residential projects that are mainly in mid- to low-end developments," said Lu Qilin, research director at Deovolente.

"In the short term,this trend will likely continue because most developers have pretty sufficient capital," he added. "There is probably no need for them to cut prices at the moment."

It all boils down to location. Most of the new units that came to market last week were in suburban areas of the city. By contrast, a new residential development on Xinzha Road in the downtown area set a minimum price of 200,000 yuan per square meter for 11 villas on offer.

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Copyright Shanghai Daily: Business