KCRE Corporate Real Estate Solutions

HOME prices may fall up to a fifth in Shanghai over the next few months as developers become more flexible in pricing, according to the property research.

Home prices in Shanghai will likely fall modestly over the next several months, possibly by 15 to 20 percent, as developers are expected to seek stronger cash flow and reduce prices in exchange for greater volume.

Sales are also supposed to rebound as the city's housing market enters its traditional high season in September and October when buyers, especially first-timers,.

The city's overall housing market registered near-record lows in May and June as buyers waited to see effects a government policies aimed at curbing housing speculation.

Fears of a real estate tax on homes have further slowed sales, with the luxury housing market being grounded virtually to a halt.

For example, two projects, 1 Xinhua Lu and Bound of Bund, both sold nothing in the second quarter of this year and Dynasty on the Bund, which launched 309 apartments for sale in April, sold just 33 units at an average of 60,000 yuan (US$8,850) per square meter by the end of May, compared to its target price of 70,000 yuan, according to research.

Price of high-end residential properties are expected to go downward as demand from investors weakens,