Shanghai new home sales fall but average price gains

New home purchases in Shanghai fell for the second week but the average price continued to rise amid robust sales in the mid- to high-end sector, according to latest data.

Sales of new homes, excluding government-subsidized affordable housing, shed 7.5 percent last week to 222,500 square meters, according to a report released yesterday by Shanghai Deovolente Realty Co.

The average price, however, rose 1.3 percent from the previous seven-day period to 25,215 yuan (US$4,133) per square meter, the second weekly gain in a row, Deovolente data showed.

"Despite a decrease in transaction volume, the local market saw strong buying sentiment in the mid- to high-end segment, with three of the city's 10 best-selling projects costing more than 35,000 yuan per square meter," said Zhu Ping, a Deovolente researcher.

Century 21 China Real Estate also confirmed the same trend yesterday. Sales of new homes priced at between 30,000 yuan and 50,000 yuan per square meter jumped 33 percent weekly to 51,000 square meters last week, the highest volume seen in five weeks, its data showed.

On the supply side, some 203,000 square meters of new houses were released locally, a weekly rise of 2.7 percent, Deovolente said.

Huang Hetao, associate director at Century 21's research department, said that new home supply, in general, remained tight in Shanghai, with transactions outnumbering supply in four of the past five weeks.

"As home buying demand continues to be robust, the local market is expected to remain a sellers' one," Huang added.