Shanghai new home sales rise 20.7 pct

New home sales in Shanghai jumped to the highest in 36 weeks amid recovering sentiment in the low to mid-end segment.

Sales of new residential properties, excluding government-subsidized affordable housing, rose 20.7 percent from a week earlier to 312,000 square meters last week, Shanghai Deovolente Realty Co said today.

The average cost of new homes dived 20.2 percent from the previous seven-day period to 20,477 yuan (US$3,260) per square meter as more buyers rushed to settle for a home in the city's more affordable outlying areas.

"The latest announcement by the central government to implement a 20 percent capital gains tax on existing home transactions has had an immediate impact on the local market," said Lu Qilin, a Deovolente researcher. "On one hand, more people rushed to conclude deals for used properties while on the other hand, a growing number of home seekers seemed eager to buy a new one as they feel developers will raise prices amid increasing demand for new homes."

Half of the city's 10 best-selling projects, including the top three best-sellers, last week cost less then 15,000 yuan per square meter. That was a sharp contrast to the previous week when half of the 10 most popular developments were sold for more than 30,000 yuan a square meter, according to Deovolente data.

Supply of new houses, meanwhile, continued to rebound for the third straight week. A total of 194,300 square meters of new residential properties were released to the market last week, a rise of 14.9 percent from the previous week.