Sluggish housing market prevails in Shanghai

Homebuyers and real estate developers in Shanghai continued to be sluggish for the third week in a row.

The purchases of new homes in the seven-day period through Sunday, excluding government-subsidized affordable housing, dropped 22.4 percent to 111,300 square meters, extending losses for the third straight week, Shanghai Uwin Real Estate Information Services Co said in a report released yesterday. It was also the ninth consecutive week that the weekly transactions stayed below the 200,000-square-meter threshold, according to Uwin data.

New home supply, an indication of developers' confidence in the property market, climbed 9.8 percent from the previous week to 78,300 square meters, Uwin data showed. But the supply was lower than the weekly average of 220,200 square meters registered over the past 12 months.

"The weakness extended into June as extremely low volumes of sales and supply were recorded during the first week," said Huang Zhijian, chief analyst at Uwin. "Both sides in the market sat on the sidelines."

The average cost of new homes rose 3.2 percent week on week to 29,631 yuan (US$4,748) per square meter, or an 18-week high as fewer mid- to low-end houses were sold, the data showed.

Of the week's top-10 best-selling projects, six of them cost an average of above 30,000 yuan a square meter.