Shanghai home prices to slip

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Shanghai will probably see the sharpest correction in home prices among all first-tier cities during the second half of this year amid abundant supply, a major industry research firm predicted Wednesday.

The average home price is likely to dip a further 15 percent in the second half in Shanghai, where new home supply, in terms of gross floor area, is expected to soar 77 percent during the period, according to a Knight Frank research report released yesterday.

That compared with a forecast of about 10 percent drop in both Guangzhou and Shenzhen in south China's Guangdong Province, and an estimated decline of less than 10 percent in Beijing.

Knight Frank estimated new home supply in Beijing will remain at a similar level as in the first half while Guangzhou and Shenzhen may see an increase of 49 percent and 46 percent, respectively.

Shanghai also faces higher pressure than its counterparts in inventory level.

If home sales for the rest of this year remain similarly sluggish as witnessed over the past three months, the number of unsold, developer-owned homes in Shanghai will jump 90 percent from June through the end of the year, the sharpest rise among the four cities. Beijing, Guangzhou and Shenzhen are projected to grow moderately by 30 percent, 35 percent and 40 percent, respectively, when compared with June under the same circumstances.

Sales of new properties plunged 42.1 percent by volume in Shanghai in the first seven months of this year, the largest year-on-year decrease among all Chinese cities, immediately followed by Beijing, which dived 37.3 percent during the same period, the National Bureau of Statistics said on Tuesday.

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