New home buying sentiment dipped to its lowest level in Shanghai in six years as the weeklong Spring Festival holiday kept most buyers sitting on the sidelines.
The area of new residential properties sold, excluding government-funded affordable housing, totaled 204,000 square meters in February, a month-on-month plunge of 59.2 percent and a year-on-year decrease of 43.8 percent, according to a report released by Shanghai Centaline Property Consultants Co on Thursday.
"That was the lowest monthly transaction of new homes in Shanghai since 2012, mainly due to the holiday factor," said Lu Wenxi, senior analyst at Centaline. "The market is expected to recover in March amid gradually improving new supply."
Average cost of new homes, meanwhile, fell 1.8 percent from January to 42,544 yuan (,706) per square meter, as projects in remote areas of the city targeting budget-tight clients remained the most popular among home-seekers.
Citywide, a residential development by Tahoe Group in outlying Changxing Island, Chongming District, outperformed all counterparts with monthly sales hitting 252 apartments, or 25,491 square meters. Average cost of the project stood at no more than 30,000 yuan per square meter.
It was closely followed by a project in suburban Jiading District, which sold 179 units, or 16,561 square meters, for a similar price point.
On the supply side, about 96,000 square meters of new houses spanning four projects were released on to the local market last month, a plunge of 78.2 percent from January and a dive of 66.4 percent from the same period a year ago, according to Centaline data.
The Tahoe project, for instance, launched 422 units, or more than 40,000 square meters in total, alone in February, the most among all developers.
Looking forward, at least four residential projects in the outlying districts of Qingpu, Fengxian and Jiading have received sales permits from the government, which will add nearly 1,300 units in new supply during the first half of March, according to a separate report by Shanghai Homelink Real Estate Agency Co.