New home sales weak on sluggish pace

New home sales in Shanghai remained below the 200,000-square-meter threshold for the seventh consecutive week in a local market still beset by sluggish momentum.

Purchases of new homes in the seven days ended on Sunday, excluding government-funded affordable housing, shed 1 percent to 149,000 square meters, Shanghai Uwin Real Estate Information Services Co said in a report released yesterday.

The average cost of new homes rose 13 percent from the prior week to 29,205 yuan (US$4,677) per square meter.

"The first 25 days of this month registered only 464,300 square meters of new home sales, or a daily average of 18,600 square meters, which is really slack for May," said Huang Zhijian, chief analyst at Uwin. "For the whole month, transactions may be only around 600,000 square meters, compared with 761,300 square meters in April."

While signs for any immediate pickup remain obscure, some real estate developers have decided it's time to return from the sidelines.

The supply of new homes for sale jumped 23 percent last week to 290,500 square meters. That was the second consecutive week above the 225,400-square-meter average for the last 12 months, accor­ding to Uwin.

"It is evidence that some developers have stopped their 'wait-and-see' attitude," Huang said. "However, their pricing strategy remains crucial in determining the robustness of sales."

The most sought-after project in the city last week was a residential project in Nanxiang in outlying Jiading District.