NEW home costs in Shanghai soared to the highest in almost a year last week amid continuously robust buying sentiment for luxury and high-end houses.
The average price of new homes, excluding government-funded affordable housing, jumped 10.1 percent from a week earlier to 25,648 yuan (US$4,084) per square meter, the highest in 49 weeks, Shanghai Deovolente Realty Co said today.
By volume, about 258,500 square meters of new residential properties were sold across the city over the seven days ended on Sunday, a weekly surge of 57.3 percent.
"Half of the city's 10 best-selling projects last week cost more than 30,000 yuan a square meter while 54 homes with a price tag of more than 50,000 yuan per square meter were sold, an increase of 21 from the previous seven-day period. Both figures indicate extremely strong buying momentum," said Lu Qilin, a Deovolente researcher. "The trend will likely continue particularly after the latest income tax announcement made by the central government as more home seekers may consider buying a new house instead of a previously owned one."
A 20 percent tax on sellers' profits on second homes was announced by the State Council on Friday. Currently, a maximum 2 percent income tax on the overall property price is enforced in the city.
"In the short-term, we are going to see a rush to close deals of existing houses but it is still unclear how big an impact it will have until detailed guidelines are released," said Huang Hetao, a research manager at Century 21 China Real Estate.