New home sales dropped one third in Shanghai last week while the average price remained below 20,000 yuan (US$3,058) per square meter for the second straight week.
Sales of new homes, excluding those built under the city's affordable housing programs, dived 33.4 percent to 123,000 square meters during the seven-day period ended Sunday, halting a three-week rally fuelled mainly by increased supply, Shanghai Uwin Real Estate Information Services Co said Monday.
The average price, meanwhile, rose 2.1 percent to 19,992 yuan per square meter. Seven out of the 10 best-selling residential projects in the city by contract area are priced at less than 15,000 yuan per square meter, Uwin data showed.
"The weekly drop in volume was partly due to the Qingming Festival but strict home purchase restrictions still seem to be the major reason behind an overall sluggish market sentiment," said Huang Zhijian, chief analyst at Uwin. "The only effective way to boost home sales is for real estate developers to cut prices sharply."
The supply of new homes to the market last week plunged 66 percent from the previous seven-day period to only 99,600 square meters.
Across the city, a total of 1,145 new housing units - 63 villas and 1,082 apartments - were sold last week. The majority of them - about half of the apartments and 60 percent of the villas - are located beyond the city's Outer Ring Road, according to Century 21 China Real Estate.
"Most real estate developers seemed undecided whether to release more homes and offer more discounts to boost sales," said Lu Qilin, research head at Shanghai Deovolente Realty.
