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Shanghai house prices fall for second straight month

KUALA LUMPUR: The Shanghai housing index fell for the second consecutive month, dropping 14 points or 0.53% to 2,551 points in July as 90% of areas covered registered a drop in housing prices, reported the Shanghai Daily.

The index, which monitors the existing house prices within the city, recorded declines in more areas.

Last month, 63 out of 68 areas suffered losses, compared with 55 areas in June.

The index started to fall in June after a 15-month rally amid a growing supply of homes and falling sales due to depressed buying sentiment caused by the central government's moves to bring down skyrocketing real estate prices.

Citing the Shanghai Existing House Index Office, the daily reported that Sanlin, located in Pudong New Area, saw its housing prices drop by 1.58% in June, marking the biggest loss, followed by Zhijiang Road in Zhabei District (1.45%) and Zhangjiang High-tech Park area in Pudong (1.44%)

Meanwhile, home prices in five downtown districts fell by 0.36% on average, led by Xuhui (0.66%).

An analyst with the index office said promotions introduced by developers in the same area have affected prices of existing properties, and transaction volumes rebounded in June as prices fell back, but demand is still largely constrained by strict mortgage policies.

Major city real estate chain Shanghai Centaline Property Consultants Ltd also said sales volumes of existing homes at its 200 branches jumped 46% on the back of demand from end-users.

Forty-five percent of existing houses traded at its branches in July were priced between 1 million (RM465,000) and 2 million yuan, while 27% of transactions comprised homes below 1 million yuan, it said.

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