Home buying sentiment cooled in Shanghai in January as transaction volume fell ahead of the Spring Festival holiday - a traditional slack season for property purchases.
Sales of new homes, excluding those built under the city's affordable housing program, tumbled 25 percent from a month earlier to 1.05 million square meters last month, according to a report released yesterday by Shanghai Uwin Real Estate Information Services Co. The average price, meanwhile, fell 5 percent from December 2010 to 22,992 yuan (US$3,494) per square meter last month due to fewer transactions of high-end and luxury houses, Uwin statistics showed.
"Despite the monthly drop of 25 percent, the past month actually witnessed quite good sales compared to same-period figures registered over the past two years," said Lu Qilin, a researcher with Uwin. "That was possibly due to the fact that more buyers were eager to conclude the transactions on fears the central government may launch more stringent policies to curb speculation."
In January 2010 and 2009, new home sales in Shanghai totaled 671,961 square meters and 463,793 square meters respectively, the report said.
With successive introduction of several tightening policies, which include higher down payment for second-home buyers, suspension of third-home purchases, a trial property tax in Chongqing and Shanghai and the latest hike in interest rates, home transactions in the coming few months are set to drop while housing prices may have to "correct" slightly to boost demand, Lu predicted.
Pan Shiyi, chairman of Beijing-based SOHO China, however, said yesterday on his blog that "the majority of Chinese real estate developers, except the small-sized ones, still have abundant capital now compared to 2009 and most of them are confident about this year sales and land bank expansion."
China Vanke, the nation's biggest listed developer, yesterday said the volume and value of its sales more than tripled in January from a year ago.
