Shanghai home sales drop 8.9%

Home buying sentiment eased again in Shanghai last week with a "wait-and-see" attitude dominating among potential buyers, according to a report.

The purchases of new residential properties, excluding government-funded affordable housing, dropped 8.9 percent week over week to 183,700 square meters during the seven-day period ended Sunday, Shanghai Uwin Real Estate Information Services Co said in a report released today.

On the supply side, 173,400 square meters of new houses were released to the market, up 20.9 percent from the previous week.

"With the new home inventory at a high level and transactions remaining flat, more real estate developers may start to offer bigger discounts as early as this month. Usually September and October are the best months for property sales," said Huang Zhijian, chief analyst at Uwin. "That will probably be the only effective way to boost home sales."

The average cost of a new home, meanwhile, rose 8.7 percent week on week to 26,504 yuan (US$4,275) per square meter, according to Uwin data.

Citywide, six of the 10 best-selling projects cost less than 20,000 yuan per square meter. A development in Nanhui, Pudong New Area, registered sales of 90 apartments at an average price of 12,690 yuan per square meter, making it the most sought-after project last week.

As of today, the city's new home inventory remained above 11.5 million square meters, which at the present pace of sales would take about 17 months for the market to digest.