Prices increase as sales ease

PUBLISHED : Wednesday, 02 September, 2009, 12:00am
UPDATED : Wednesday, 02 September, 2009, 12:00am

Sales activity in Shanghai's residential property market eased in the last two months, but average prices edged further ahead despite the slowdown in volumes as more luxury projects were launched for sale, property consultants said.

Average prices were up 5.3 per cent in July month on month, or 24.3 per cent year on year, property consultant Colliers International said. The momentum continued in August.

A total of 468 luxury residential units priced at above 40,000 yuan (HK$45,453.3) a square metre changed hands last month, with total sales proceeds amounting to 6.56 billion yuan, both volumes and values hitting record highs for the year, Shanghai Securities News reported.

The city's luxury residential market has been on the rising track since the property market rejuvenated starting from the second quarter, said Xue Jianxiong, an analyst at the mainland's largest property brokerage, E-House China.

Sales of homes in Shanghai worth 40,000 yuan and above per sq m totalled 30 units in April, with values totalling 585 million yuan. But in July the monthly transaction volume and value surged to 307 units and 3.91 billion yuan, he said.

About 600 transactions were recorded in the luxury market in the first half, the brokerage said earlier.

Lee Hing-yin, director for research and advisory at Colliers' East China division attributed the robust activities in the luxury market to the ample liquidity and loose loan policy.

'People are betting their money on properties after making profit from the stock market. Anticipation of inflation also prompted quite a few buyers,' said Lee.

The debut launch of some high-end residential projects achieved encouraging sales, said agents.

Analysts said the improving market sentiment and anticipation of diminishing inventory and rising home prices had made up for negative news such as tighter home loan approval for second-home buyers.