NEW home purchases fell in Shanghai last week but remained above the key threshold of 300,000 square meters.
Excluding government-subsidized affordable housing, sales dived 23.8 percent from the previous week to 300,900 square meters, Shanghai Uwin Real Estate Information Services Co said today.
"Despite the notable drop, weekly sales of new homes remained above 300,000 square meters for the third straight week, indicating rather strong momentum among home seekers," said Huang Zhijian, chief analyst at Uwin. "However, with the upcoming implementation of a 20 percent capital gains tax, sentiment is expected to fall as 'panic buying' comes to an end."
As of Sunday, new home sales totaled 1.1 million square meters in Shanghai this month, according to Uwin data. If that pace continues this week, transaction volume will hit 1.43 million square meters in March, which would be the most since 2010, Huang said.
The average cost of a new home, meanwhile, climbed 3.9 percent from the previous seven-day period to 23,421 yuan (US$ 3,730) per square meter.
Half of the city's 10 most sought-after projects cost more than 25,000 yuan per square meter. That compared to a week earlier when eight of the 10 best-selling developments asked for less than 20,000 yuan a square meter.
On the supply side, about 452,000 square meters of new houses, all apartments, were released to the market, a week-on-week surge of 274 percent.
"Most of the projects released last week are in suburban areas of the city and mainly target owner occupiers," said Huang Hetao, a research manager with Century 21 China Real Estate. "As the traditional high season for home purchase is approaching, we expect good sales at those projects amid continuously robust demand from end-users."