Shanghai’s new home costs hit new high

KUALA LUMPUR: New home prices hit record highs in Shanghai last month as sales of luxury housing continued to be robust despite Beijing’s efforts to curb speculation, said

Average prices of new homes, excluding those designated for relocated residents under urban-redevelopment plans, rose 16% from March to 22,926 yuan (US$3,358) per sq m, reported Shanghai Uwin Real Estate Information Services Co as saying on May 5.

Sales of new homes rose 28% from a month earlier to 1.02 million sq m, while supply went up 76% to 1.23 million sq m over 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 sq m of new homes, costing 50,000 yuan per sq m, were sold in April, compared with 23,000 sqm in March, Uwin said.

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

Beijing on April 15 raised the down-payment requirement on second-home mortgages to 50% from 40%.

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

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.

These efforts to cool the market seemed to have work. Buyer sentiment, mainly for mass-market products, started to ease immediately.

In Shanghai, the average daily new home transaction volume fell to just less than 50 units per day between May 1 and 4 from 330 units per day in the first half of last month, according to Uwin.

A survey by Shanghai Centaline Property Consultants Ltd found said only 23% 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% said they would wait-and-see.

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