Tightening measures coupled with scorching heat has dragged Shanghai's housing sales to a seven-year low in July, while average home prices also fell to this year's lowest due to a structural shift.
The area of new homes sold, excluding government-subsidized affordable housing, fell 2 percent from June to 672,000 square meters last month, Shanghai Centaline Property Consultants Co. said in a report released yesterday. That marked a year-on-year plunge of 45.1 percent and was the lowest July figure since 2011.
"Weakness extended in July which is a traditional low season for property sales, proved by sluggish sentiment among both home buyers and real estate developers," said Lu Wenxi, senior manager of research at Centaline. "Low-end houses located beyond the city's suburban ring became the major force in the market in terms of both transaction and supply, as rein-in policies to curb speculation remain strictly enforced."
The average cost of new homes fell 2.9 percent month over month to 45,925 yuan (,821) per square meter, the lowest since January, Centaline data showed.
Seven of the 10 most sought-after projects in July cost no more than 30,000 yuan per square meter, despite robust sales registered at a project in Baoshan District, a separate report by Shanghai Homelink Real Estate Agency Co showed. Altogether 559 units, or the most recorded last month at a single project, were sold for an average price of 55,521 yuan per square meter.
More than 48 percent of the new houses sold last month were located beyond the suburban ring, up from 37.7 percent in the first six months.
That was also true with residential supply.
Nearly 53 percent of new homes launched in July — which fell 25 percent from June to 464,000 square meters — were located beyond the suburban ring, said Homelink.