Shanghai new home costs hit record

0 CommentsPrint E-mail Shanghai Daily, May 6, 2010
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New home prices jumped to a record high in Shanghai in April as sales of luxury housing continued to be robust despite recent government policies to curb speculation.

Average prices of new homes, excluding those designated for relocated residents under urban-redevelopment plans, climbed 16 percent from March to 22,926 yuan (US$3,358) per square meter, Shanghai Uwin Real Estate Information Services Co said yesterday.

Sales of new homes rose 28 percent from a month earlier to 1.02 million sqm, while supply surged 76 percent to 1.23 million sqm during the same period, surpassing sales for the first time since January 2009.

"While new home sales continued to shrink in the city since the second half of last month mainly due to the series of polices launched by the central government to rein in speculation, the high-end housing market remained unaffected," said Lu Qilin, a researcher with Uwin.

"At the same time, the local supply of mid- to low-end homes still seemed largely inadequate," Lu said.

Sales of luxury housing more than tripled in Shanghai last month. More than 70,000 sqm of new homes, costing 50,000 yuan per sqm, were sold across the city in April, compared to 23,000 sqm in March, Uwin said.

On the supply side, only 190,000 sqm of new houses, with a price tag of less than 15,000 yuan per sqm, were launched on the market in April, while 1.04 million sqm of new houses, costing more than 15,000 yuan per sqm, were introduced during the same period, Lu said.

The central government on April 15 raised the down-payment requirement on second-home mortgages to at least 50 percent from 40 percent and reiterated that an extra 10 percent should be adopted on interest rates for these homes.

Two days later, a State Council, or Cabinet, notice was issued saying that banks should suspend housing credit to third or more home buyers.

It also said financial institutions should stop offering loans to people who had not paid personal income tax or social security funds in the past 12 months in places where they were buying homes.

As a result, buyer sentiment, mainly for mass-market products, started to ease immediately.

In Shanghai, for instance, the average daily new home transaction volume just fell to 230 units in the second half of April from about 330 units per day in the first half.

And it dropped to about 100 units per day during the last few days of April and then retreated to less than 50 units on average between May 1 and 4, according to Uwin.

A survey by Shanghai Centaline Property Consultants Ltd found that only 23 percent of visitors to a real estate fair held between April 30 and May 3 in Shanghai said they would consider buying a house this year. More than 51 percent said they would take a wait-and-see attitude.

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