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New homes sales rebound in Shanghai

THE area of new homes sold in Shanghai rebounded above the 400,000-square-meter threshold last week with continuously robust sentiment in the high-end segment, latest market data suggest.

Around the city, 417,500 square meters of new residential properties, excluding government-subsidized affordable housing, were sold during the seven-day period ended Sunday, a week-over-week surge of 69 percent and the highest in nearly one month, Shanghai Deovolente Realty Co said in a report released today.

"Increased supply coupled with developers' sales campaigns jointly boosted last week's transaction with luxury housing units remaining highly sought after among home buyers," said Lu Qilin, a researcher at Deovolente. "The central bank's decision announced over the weekend to simultaneously cut interest rates and reserve requirements for banks, meanwhile, is supposed to leave positive impact over the country's property market and therefore might help extend strength of the market through the traditional low season which usually falls in July."

Effective yesterday, the one-year lending and deposit rates have been cut by 25 basis points to 4.85 percent and 2 percent respectively while the reserve requirement ratio, the amount of cash banks are required to hold, has been cut by 50 basis points for commercial banks serving rural areas, agriculture and small businesses. The RRR for finance companies, or non-bank financial institutions, was cut by 300 basis points to “support the real economy and promote restructuring” according to the People's Bank of China.

By price, the average cost of new homes fell 2.4 percent week on week to 34,667 yuan (US$5,572) per square meter, staying above the 30,000 yuan per square meter threshold for the ninth straight week, Deovolente data showed.

A total of 399 units of new houses with a price tag of 50,000 yuan per square meter and above were sold in the city last week, a rise of 145 from the previous seven-day period. And among the ten best-selling projects, half of them cost more than 30,000 yuan per square meter.

In contrast, on the supply side, only 95,100 square meters of new housing properties were released to the local market, a dive of 63.5 percent from the previous week.

As of Sunday, the area of new homes sold exceeded 1.17 million square meters in Shanghai, according to Deovolente data. That compared to April and May, when new homes totaling 1.24 million square meters 1.42 million square meters were sold, respectively.




 

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