New home sales rebound as average price falls

Sales of new residential properties rebounded moderately in Shanghai last week amid ample new supply, while the average cost fell to a four-month low due to a structural shift toward medium to low-end homes, the latest market data showed.

The area of new residential properties sold, excluding government-subsidized affordable housing, rose 7.5 percent from a week earlier to 101,000 square meters during the seven days to Sunday, Shanghai Centaline Property Consultants Co said in a report released on Tuesday.

“Outlying areas dominated the market last week, with western Qingpu District climbing to first place with weekly sales of 17,000 square meters, a surge of 143 percent from the previous seven-day session,” Lu Wenxi, Centaline’s senior research manager said. “The average price of a new home was therefore dragged down quite notably amid sluggish transaction of expensive homes.”

Citywide, new homes sold for an average price of 52,545 yuan (US$7,791) per square meter, a week-over-week drop of 10.7 percent, according to Centaline data.

While overall sentiment among buyers still remained rather weak despite mild recovery, medium to low-end homes seemed to gain much more popularity than their more expensive counterparts. In the top 10 list, for instance, only one project had a price tag of over 80,000 yuan per square meter, while the rest all cost no more than 60,000 yuan.

The most sought-after residential development, located in Qingpu, unloaded 6,230 square meters, or 50 units, last week for an average price of 35,379 yuan per square meter. It was most closely trailed by one project in remote Chongming District, where 4,165 square meters, or 29 units, were sold for an average cost of 33,273 yuan per square meter, Centaline data showed. 

A housing development located in former Zhabei and now Jing’an District managed to squeeze into the list after selling 14 apartments during the seven-day period for an average price of 86,144 yuan per square meter, taking 10th place.

On the supply side, eight developments, or 173,000 square meters of new homes in total, were released onto the market, a surge of 366 percent from the previous week.

“As the Spring Festival is just around the corner, buyers’ momentum is destined to weaken while some real estate developers might try to catch the last-minute opportunity to boost sales,” Lu noted. “But that is not going to change the overall holiday mood in the market much so we do not expect to see any major improvement within the next three to four weeks.”