Shanghai new home market weak for 3rd week

Shanghai's new home market remained sluggish for a third straight week despite a rebound in transactions with buyers attracted to mid- to low-end projects.

The purchases of new homes, excluding government-subsidized affordable housing, jumped 20.6 percent from the previous seven-day period to 150,800 square meters, Shanghai Uwin Real Estate Information Services said in a report released yesterday.

The new homes cost an average of 25,860 yuan ($4,146) per square meter, a weekly drop of 3.4 percent.

"An extremely slack momentum continued to prevail in the local housing market for the third straight week this month, leading more potential buyers to sit on the sideline before clearer signals emerge," said Huang Zhijian, chief analyst at Uwin.

"There won't be any major turnaround if developers don't offer notable price cuts or release more mid- to low-end products to the market."

As of Sunday, 315,000 square meters of new homes were sold in Shanghai in May, or a daily average of just 17,500 square meters, according to Uwin data. That compared with 761,300 square meters in April.

However, the supply of new homes released locally more than tripled from the previous week to 236,700 square meters, according to the data.