PRICES of new homes in Shanghai stood below the 20,000 yuan (US$2,950) per square meter threshold for the sixth straight week as a result of sluggish sales of mid- to high-end residential projects.
Average price of new homes, excluding those designated for relocated residents under urban redevelopment plans, dipped 2 percent to 18,367 yuan per square meter last week, Shanghai Uwin Real Estate Information Services Co said yesterday.
The weekly price of new homes in Shanghai soared to a record 26,089 yuan per square meter during the week between April 19 and 25, Uwin statistics showed.
"Seven out of the 10 best-selling housing projects by area last week were sold below an average 17,000 yuan per square meter as real estate developers began offering some discounts on their projects, almost all located in outlying areas of the city, such as Jiading District," said Lu Qilin, a researcher with Uwin. "But we've already noticed a price rebound in some of those projects as developers just hiked them again after receiving a positive response from buyers."
Supply of new homes, meanwhile, stayed at a weekly low of 80,000 square meters as real estate developers, keeping a wary eye on the government's future stance, chose to wait for clearer signals. The average weekly supply over the past 12 months was 230,000 square meters.
"Sales volume of luxury housing dropped significantly after the central government launched its toughest-ever measures to rein in speculation in mid-April, which immediately dragged down the average price for new homes," said Sky Xue, an analyst with the China Real Estate Information Corp, a major real estate information, consulting and online services provider.
In Shanghai, a total of 319 units of new luxury houses, costing more than 50,000 yuan per square meter, were sold in April but the monthly figure plunged to 115 units in May and 122 units in June, according to CRIC research.
The current slack momentum among both developers and buyers will probably last until September as July and August are the traditional low months for housing sales, industry analysts said.