Shanghai new home sales still seen weak for 4th week in a row

New home sales in Shanghai remained below the 150,000-square-meter threshold for the fourth straight week despite a week-on-week increase.

The purchases of new homes, excluding government-funded affordable housing, rose 26.4 percent week on week to 140,700 square meters during the seven-day period ended on Sunday, Shanghai Uwin Real Estate Information Services Co said in a report released yesterday.

The gains were mainly due to sales at a mid- to low-end project in outlying Jiading District, said Huang Zhijian, chief analyst at Uwin. "The overall volume for June may remain very low if real estate developers continue to maintain their prices without offering any big discounts," Huang said.

More than 210 units at the Jiading development were sold last week for an average price of 16,715 yuan (US$2,692) per square meter, Uwin data showed. This brought the average cost of a new home down 12.5 percent week on week to 25,916 yuan per square meter citywide.

Lu Qilin, a researcher at Shanghai Deovolente Realty Co, said: "The average price recorded last week was down 18.7 percent from the average price registered at the same project during the second half of last year."

"That might be the real reason behind the strong sales amid an overall sluggish environment for home sales," Lu said.

The high-end market saw 38 new homes costing over 50,000 yuan per square meter each sold last week in the city, a decrease of seven from the previous seven-day period, according to data from Deovolente.