KCRE Corporate Real Estate Solutions

NEW home sales in Shanghai dropped below 100,000 square meters for the sixth consecutive week amid sluggish buyer sentiment while average prices also fell after more homes in outlying areas were sold during the period.

Average prices shed 6 percent to 19,378 yuan (US$2,837) per square meter last week while the supply of new homes rebounded 25 percent to 104,000 square meters during the seven-day period.

New home sales dropped 32.5 percent to 7.19 million square meters in Shanghai during the first five months of this year, Shanghai Statistics Bureau said on its Website yesterday.

Market sentiment remained slack over the past two months since the central government unveiled tightening measures in mid April to rein in speculation in the country's overheated housing market.

In Shanghai, the "wait-and-see" sentiment among buyers has hit the upscale and mid to low-end housing markets as they waited for clearer signals from the local government. Unlike Beijing, Guangzhou, Shenzhen and Qingdao, Shanghai has not released detailed guidelines to implement national policies.

For instance, in the high-end residential market, only 20 luxury units costing over 50,000 yuan per square meter were sold in Shanghai during the first half of June, and 36 out of 45 luxury developments available for sale saw no sales at all during the same period, according to a report released yesterday by China Real Estate Information Corp.