Home buyers quiet amid total lack of new supply

WEAK sentiment among new home buyers extended for another week in Shanghai amid zero new supply, the latest market data showed.

The area of new residential properties sold, excluding government-funded affordable housing, edged up 0.8 percent from a week earlier to around 89,000 square meters during the seven days to Sunday, remaining below the 100,000square-meter threshold for the second consecutive week, Shanghai Centaline Property Consultants Co said.

The average cost of a new home climbed 11.2 percent to 65,248 yuan (US$9,373) per square meter, according to Centaline data.

“Only the Pudong New Area and Chongming District managed to secure weekly sales of more than 10,000 square meters, evidence of lackluster market momentum,” said Lu Wenxi, senior manager of research at Centaline.

“That was further proved by the fact that not a single project was able to register transactions of over 100 units during the seven-day period, which is a frequently used criteria to judge the general buying sentiment in the property market.”

A total of 13,000 square meters of new houses were sold in Chongming last week, a week-over-week dive of 60.6 percent.

Pudong, where weekly sales of new homes remained almost unchanged at about 15,000 square meters, was the only area that outperformed Chongming.

Medium to high-end developments continued to dominate the local new housing market, with eight out of the top 10 best-selling projects bearing a price tag of more than 80,000 yuan per square meter on average.

On the supply side, not a single unit of new homes were released to the local market for sale, compared with some 303,000 square meters launched during the previous seven-day session, Centaline data showed.

“The market is currently plagued by a lack of supply in medium to low-end houses which remain the major driving force of the market,” Lu said.

“For the rest of this year, I see small chances for weekly sales to reach the 200,000-squaremeter threshold.”