New home sales in Shanghai dropped to the lowest in August in seven years as tighter purchase restrictions eroded further an already slack buying sentiment.
Sales of new homes, excluding affordable housing, fell to 576,000 square meters last month, the lowest August volume registered in the city since 2005. The sales represented a 25 percent tumble from July and a decrease of 18 percent from the same month a year earlier, according to a report released yesterday by China Real Estate Information Corp (CRIC).
The average price, however, was 22,026 yuan (US$3,447) per square meter last month, unchanged from a month earlier, CRIC data showed.
"While the monthly transaction volume has been declining since May, the sale prices at most of the city's residential projects remained quite firm," said Sky Xue, an analyst at CRIC. "Among the few developments that offer discounts at the moment, the majority has cut not more than 3 percent."
Housing sales in Shanghai were further damped last month after the city announced in late July that it would enforce more strictly its home-purchase ban on buyers without local residency permits across the city. Buyers from out of town who can't produce tax or social insurance certificates to prove they have resided in the city for a cumulative 12 months over the past two years will be banned from buying homes. Previously, some of them managed to bypass the rule by making a one-time payment to the authorities for their "overdue" taxes.
"Buying sentiment was extremely sluggish last month, with only Pudong New Area and Baoshan District managing to record sales of more than 100,000 square meters," said Tang Zhengwei, an analyst at Soufun.com, China's largest real estate website. "Six out of the 10 best-selling residential projects by contracted area are located there."
