Home sales enter 10th month of price falls

PRICES for sales of pre-occupied homes in Shanghai lost steam for the 10th straight month last month, despite a moderate rebound in sales volume, official data released yesterday showed.

The Shanghai Existing House Index Office’s index, which monitors monthly price changes in 130 areas of the city, dipped 0.15 percent, or four points, from August to 3,912 last month.

Citywide, about 14,010 homes changed hands in September, a month-on-month increase of 3.8 percent, or 13.1 percent year on year.

Homes costing less than 3 million yuan (US$433,034) accounted for 64.6 percent of the total. Homes worth 5 million yuan or more made up about 12.8 percent, the office said.

“The index has been going south for 10 consecutive months, indicating lackluster market momentum amid rather grim industrial prospects,” the office said.

“The recent price cuts at some new residential property developments have been bringing some pressure on the existing housing market.”

Prices of occupied homes climbed in 46 areas, fell in 57 and were flat in 27, according to the office.

Pujiang in Minhang District, Nanqiao New City in Fengxian District and Jinshan New City in Jinshan District were the three most sought-after areas last month with sales of 418, 335 and 324 homes.

The city had 77,002 occupied homes available for sale as of the end of September, a monthon-month drop of 2.7 percent and a year-on-year plunge of 50.8 percent, according to data compiled by the office.

A separate report yesterday by global property consultancy Cushman & Wakefield said prices for new homes fell over the first three quarters as supply outstripped demand because local watchdogs implemented caps on new residential projects when developers apply for sales permits.

About 5.41 million square meters of new houses were released into the local market in the nine months to end-September, a year-on-year jump of 52 percent. But only 4.99 million square meters of new homes were sold in the same period, an insignificant retreat of 5.6 percent from the same period a year earlier, Cushman & Wakefield said.

“Ample supply of new homes, coupled with recent government moves to further restrict housing speculation by limiting enterprises’ ability to buy, has left more potential buyers sitting longer on the sideline,” said Jenny Wu, senior director and head of residential business for Cushman & Wakefield’s East China operations.

“For the rest of the year, we expect tightening policies to remain unchanged while housing prices will be generally stable.”