Sales of new homes in Beijing recorded a 55 per cent week-on-week growth last week, driven by limited supply, according to property agents.
Mainland property agent Home Link said the number of new flats sold during the week between June 17 and 23 rose to 1,719, and the average transaction price rose 13.2 per cent to 24,984 yuan per square metre.
The big increase in the average selling prices was driven mainly by an increase in sales of new homes worth more than 20,000 yuan per square metre in the Fifth Ring Road, it said.
As of June 24, the number of residential transactions in the both the primary and secondary markets had surged 40 per cent to 41,645, while the average transaction price increased 11.9 per cent to 22,445 yuan per sq m from the same period last year.
"The supply of new homes has fallen to 600 flats as only three new projects secured pre-sale approval last month. Sales transactions and prices have been driven by limited supply," Home Link said.
It expects sales to increase to between 6,500 and 7,000 this month.
In the secondary residential market in Beijing, the number of transactions rose to 2,666 between June 1 and 10, up 76 per cent from a month ago. "The strong demand was mainly because of solid interest from the first time buyers and upgraders," according to data from Beijing government.
However, choices for home seekers in the secondary market have been reduced as most existing owners preferred to hold their flats instead of selling. "Most owners are unwilling to offer big discounts and are making negotiations more difficult," it said.
Despite the sharp rise in secondary market sales this month, transaction volumes were 50 per cent below deal numbers in the second half of last year.