Shanghai home purchases gain slight momentum, exceed 150,000 square meters

Weekly new home purchase in Shanghai climbed above 150,000 square meters for the second time in two months following a 20 percent rebound as limited momentum extended for another week.

The sales of new residential properties, excluding government-funded affordable housing, jumped 19.8 percent week on week to 168,500 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said in a report released today.

The average cost of new homes, meanwhile, fell 4.9 percent from the previous week to 24,642 yuan (US$3,974) per square meter.

"Robust transaction registered at projects targeting first-time home buyers helped boost the overall sentiment in the local market a bit," said Lu Qilin, a Deovolente researcher. "Correspondingly, it also dragged down the average housing price for the same period."

Half of the city's Top 10 best-selling residential projects cost less than 20,000 yuan a square meter, with the most popular development seeing 221 units sold for an average price of 15,175 yuan per square meter, Deovolente data showed.

On the supply side, new homes totaling 423,200 square meters were released to the local market, a week-over-week surge of 63.8 percent. Nearly 85 percent of them, or 358,000 square meters, are located beyond the city's Outer Ring Road.

As of Sunday, new home sales stood at 432,000 square meters in Shanghai in June, while new home supply exceeded 910,000 square meters during the same period, according to Deovolente data.

"While supply remains abundant, it won't necessarily help trigger sales unless real estate developers start to offer notable discounts," said Huang Zhijian, chief analyst at Shanghai Uwin Real Estate Information Services Co.