Residential buildings are seen in downtown Shanghai. New home sales rebounded last week in the city by both volume and price amid an increased supply but the central government's latest tightening measures are raising pressure for a major correction in the market. [Photo: Shanghai Daily]
New home sales rebounded last week in Shanghai by both volume and price amid an increased supply but the central government's latest tightening moves are raising pressure for a major correction in the market.
New homes totaling 267,000 square meters, excluding those built under the city's affordable housing program, were sold across the city during the past week ended Sunday for an average 23,810 yuan (US$3,613) per square meter, up 16 percent and 8 percent from a week earlier, Shanghai Uwin Real Estate Information Services Co said yesterday.
"A surge in supply, which more than doubled from a week earlier to 207,000 square meters, triggered home sales over the past week," said Lu Qilin, a researcher at Uwin. "But the tougher measures will raise pressure for the local market to make a major correction soon, particularly in the mid- to-high-end sector."
The State Council, China's Cabinet, announced eight new steps on Wednesday in its efforts to crack down on surging housing prices. Shanghai and Chongqing both launched trial operations on a property tax the next day.
Local residents with two homes already will be banned from further purchases and those from outside the region with one home already will not be permitted to buy more and won't be able to buy any home if they have not been long-time residents and can't provide tax or social insurance certificates to show their length of residence, the Cabinet said last week.
An online survey among 2,000 respondents conducted by real estate website Soufun.com also found that the majority, or nearly 60 percent, thought the ban on new home purchases was probably the harshest government measure to rein in speculation.
"It's still a bit early to predict their impact on the city's housing market until details for implementation are released by the local government," said Sky Xue, an analyst with China Real Estate Information Corporation. "More important is whether such policies can be executed strictly."