Shanghai property market turns weak in Jan

Sentiment among home buyers and real estate developers both fell in Shanghai in January, terminating a major rebound which dominated the last quarter of 2014, latest market data suggest.

The purchases of new residential properties, excluding government-subsidized affordable housing, plunged 44.8 percent from December to 756,500 square meters last month, the lowest volume since September last year, Shanghai Uwin Real Estate Information Services Co said in a report released today.

"It was an abrupt drop from the previous month when new home sales surged to the highest in 2014 to 1.37 million square meters, partly boosted by speculations that the city government may revoke its home purchase restriction policy," said Huang Zhijian, chief analyst at Uwin. "As the Spring Festival is approaching, slack momentum will definitely extend for another month while it is a bit hard to say whether a recovery is likely in March."

Citywide, medium- to low-end properties continued to dominate the market with eight of the 10 most popular projects sold last month bear a price tag of less than 23,000 yuan (US$3,710) per square meter. Average cost of a new house stood at 28,659 yuan per square meter in January, a month-over-month decrease of 4.5 percent.

A development in outlying Sijin, Songjiang District, became the most sought-after project last month after 246 apartments were sold for an average 22,602 yuan per square meter, according to Uwin data.

On developers' side, meanwhile, about 688,100 square meters of new houses were released to the local market last month, a sharp drop from December when new home supply almost reached 1.5 million square meters, Uwin said.

"While January is a traditional low season for home purchase due to the cold weather and the Lunar New Year factor, developers should remain cautious and spare no effort unloading their stocks because the city's inventory still remains at a very high level despite a significant rebound registered in the fourth quarter of last year," Huang added.

At the moment, new homes available for sale stood at over 12.8 million square meters across the city, according to fangdi.com, the city's official real estate information website.