New home sales plunged in Shanghai last month amid historically low supply, suggesting extremely sluggish sentiment among both home buyers and real estate developers as tightening measures continued to bite.
The area of new homes sold, excluding government-funded affordable housing, dropped 36.9 percent from September to 335,000 square meters, Shanghai Centaline Property Consultants Co said in a report released yesterday. Year on year, that saw a dive of 61.4 percent.
"It must be the worst performing October in history and probably the lowest monthly volume registered in the city since 2012," said Lu Wenxi, senior manager of research at Shanghai Centaline. "That was roughly equivalent to the weekly volume in 2016, hindered most by extremely slack new supply."
Around the city, only one project totaling 7,400 square meters of new houses were released in October, down 96.7 percent from September. That was partly caused by the Mid Autumn and National Day holidays, which both fell last month.
The new homes were sold for an average 48,171 yuan (US,246) per square meter, a month-on-month rise of 5.3 percent.
Nine of the 10 most sought-after projects cost between 30,000 yuan and 60,000 yuan per square meter, with the remainder priced at below 30,000 yuan per square meter, according to Centaline data.
In addition to sluggish new supply, a lackluster existing property market also affected transactions in the new housing market.
"As rein-in policies to curb speculation remained unchanged, the local existing home market also suffered a major retreat," said Zhang Yue, chief market analyst at Shanghai Homelink Real Estate Agency Co. "Many buyers seeking new houses won't be able to enter the market until their old properties are sold."
The city's new home inventory now stands at around 5.11 million square meters, or over 33,000 units, down from 6.03 million square meters, or about 40,000 units, by the end of June, according to Homelink data.