First-time buyers boost home sales to 21-week high

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STRONG sentiment among first-time buyers boosted the city's new home purchases to a 21-week high while the average home price declined, the latest data showed.

Sales of new residential units, excluding government-funded affordable housing, jumped 34.5 percent weekly to 265,900 square meters during the seven-day period ended this Sunday, according to Shanghai Deovolente Realty Co.

"Last week's transaction volume, which was the second-highest so far this year, was driven by robust demand from budget-tight home buyers," said Lu Qilin, a Deovolente researcher. "I expect the total volume to exceed 900,000 square meters in November, which is likely to be the second-best month in sales after June."

The new homes were sold at an average price of 20,233 yuan (US$3,211) per square meter, a drop of 16 percent from the previous week, according to Deovolente data.

Nine of the city's ten best-selling housing developments cost no more than 18,000 yuan per square meter last week. The most popular development sold 260 apartments at an average 13,128 yuan per square meter.

On the supply side, more than 265,000 square meters of new homes were released to the local market, the highest weekly volume in nearly two months.

As of Sunday, new home purchases totaled 795,500 square meters this month, Shanghai Uwin Real Estate Information Services Co said.

Compact apartments remain the most popular products, Uwin research found.

"It will take just 5.7 months to unload the city's stock of new apartments no bigger than 100 square meters," said Huang Zhijian, chief analyst with Uwin. "Usually, we consider the supply and demand is in balance if the period is around seven or eight months."

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