A new residential development project is under construction in Pudong New Area in Shanghai. The average price of new homes in the city shot to a seven-month high of more than 24,000 yuan (US$3,626) per square meter last week even as the government reiterated that it will still continue to tame prices. [Shanghai Daily]
The average price of Shanghai's new homes shot to a seven-month high of more than 24,000 yuan (US$3,626) per square meters last week even as the government reiterated that it will still continue to tame prices despite unveiling policies that don't seem to be working.
New homes, excluding budget homes and houses designated for relocated residents, were sold at an average price of 24,476 yuan per square meters last week, the highest since May 10, Shanghai Uwin Real Estate Information Service Co said.
Although still a week left to the end of the year, the price hike has already lifted the average price for the whole of 2010 to over 20,000 yuan, a 32 percent jump from a year ago. In 2009, home prices gained an annual 16 percent, Uwin said.
Last week, about 367,000 square meters of new homes were sold, a weekly hike of 34 percent, and the second highest since June, said Uwin.
Though the city added an extra 461,000 square meters to the market last week, the price hike was inevitable when people were buying high-end houses, a Uwin director said.
"The rise was mainly because of higher sales of high-end homes, which pushed the average price higher," said Lu Qilin, head of research of Uwin.
Seven out of 15 new projects last week were high-end residences. The average price for the seven projects was above 30,000 yuan per square meters, with the highest reaching nearly 100,000 yuan, according to Uwin.
China announced on Christmas Day a rise in its benchmark one-year lending rate and in the deposit rate, the second increase within two months as the government goes all out to tame inflation and asset bubbles.
"With rising interest rates, the real buyers either struggle to buy a low-end home or simply give up the idea of buying," he said.
Premier Wen Jiabao pledged in a radio interview on Sunday the government will focus more on easing home prices next year, admitting that measures this year had not been effective.
Lu said local governments, developers and banks were not taking them "really seriously."
"There's a joke in the industry. Whether it is the managers who have the call on the housing price or the premier," Lu said. "The facts showed this year the managers won."
