The plummeting sales of the city's used apartments, largely caused by people's wait-and-see attitude, has led Shanghai's second-hand housing index to fall for the first time since October 2006.

The index, covering prices of used apartments across the city and compiled by Website www.ehomeday.com, dropped 0.45 percent from July to 2,385 last month.

The first drop of the index in 22 months came as many used apartments flooded the market, with potential buyers in no rush to seal a deal.

According to the index compiler, more than 120,000 second-hand apartments were listed for sale by the city online real-estate broker in August and met a lukewarm response as consumers expect a big downward correction.

From January, the index increased 1.3 percent, 1.1 percent, 1.96 percent, 1.03 percent, 0.98 percent, 1.05 percent and 0.38 percent each month.

"The trend has become clear as the transaction volume of second-hand apartments continue to shrink, following the reduction in sales of new apartments," said the compiler.

In August, the volume of used apartments sold in Shanghai dropped 24 percent, pushing sellers and real-estate developers to cut prices.

China Vanke Co, the country's leading real-estate company, earlier this year launched a promotional scheme, hoping to make its sales target of 80 billion yuan (US$11.70 billion) for 2008.

However, Vanke's sales for the year so far stand at less than 30 billion yuan.

Across the city, the index of used apartments in Pudong New Area dropped the most - a decline of 1.18 percent.

Huangpu District was the only area that lodged a growth, inching up 0.28 percent.

In downtown areas, the index for second-hand homes along Nanjing Road W. and Jiangning Road dropped 1.21 percent and 1.61 percent.

"The market is set to enter a period of an all-round correction," said the compiler.

The local rental index, also released by the Website, edged up 1.0 percent, or 13 points, to 1,240 last month.

The average monthly rent for high-end apartments, usually asking for more than 6,000 yuan for a two-bedroom unit, rose 0.2 percent, with the Nanjing Road E., Jing'an Temple and Laoximen areas leading the increases.

Middle-level properties and privatized public apartments both secured stronger gains in rentals last month.

Prices for apartments asking for 2,000 yuan to 6,000 yuan a month for a two-bedroom unit jumped 0.9 percent in August, with the districts of Yangpu and Putuo both recording big increases.

(Shanghai Daily September 10, 2008)