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Home purchases rebound in city as prices reach high

BUYING sentiment for new homes rebounded in Shanghai for the second straight week despite a continuously subdued market, latest market data showed.

The purchases of new residential properties, excluding government-subsidized affordable housing, rose 5 percent week on week to 173,900 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said in a report released today.

The mild increase was mainly fuelled by comparatively strong demand in the high-end segment, which helped push up the average cost to a nine-week high of 27,800 yuan (US$4,484) per square meter, which represented a rise of 11.3 percent from the previous week, according to Deovolente data.

Sales of luxury houses with a price tag of 50,000 yuan per square meter and above, for instance, reached 70 units last week, an increase of 18 from the previous week.

"The recent recovery in transaction volume still seemed far from satisfactory as September is traditionally one of the best months for property sales in China," said Lu Qilin, a Deovolente researcher. "Developers have to cut prices if they want to reduce their inventories as far as the home purchase restriction policy remains in place in the city."

Only six cities in the country including the four first-tier ones still adopt such an austerity measure while more than 40 of their counterparts -- all second- and third-tier ones -- have already revoked the policy over the past few months as local governments began to intervene.

Citywide, a residential project in Zhoukang of Nanhui, Pudong New Area, sold 24 units for an average price of over 32,000 yuan per square meter, making it the best-selling development in the city for the seven-day period.

As of Sunday, new home sales in Shanghai totaled 476,200 square meters in September, or a daily average of 22,700 square meters, according to a separate report by Shanghai Uwin Real Estate Information Services Co.




 

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