Shanghai narrowly escaped a fall in new home prices last month, but the other nine key mainland cities tracked by the SCMP-Creda index all suffered a drop, with Hangzhou in Zhejiang province the hardest hit. New home prices in Shanghai inched up 0.25 per cent from May. However prices fell 0.61 per cent in Beijing, 1.84 per cent in Shenzhen and 0.05 per cent in Guangzhou. Hangzhou suffered the biggest drop of 2.06 per cent. The index, a collaboration between the South China Morning Post and the mainland consultancy China Real Estate Data Academy, also covers Tianjin, Chongqing, Wuhan in Hubei province, Nanjing in Jiangsu province and Chengdu in Sichuan province. But the index does not include the vast number of smaller cities where prices are suffering the most, as the rush by local governments to sell land in the past few years has resulted in a housing glut. "After a long period of decline in transactions, prices have started to correct, too," said Chen Sheng, Creda's dean and a property industry veteran. "However, the divergence between cities is increasing," he added. "Although prices are suffering downward pressure, the pace of the fall is different." Shanghai continued to be the most expensive city on the mainland after overtaking Beijing in May. The average new home price in the financial hub stood at 27,720 yuan (HK$34,830) per square metre. In year-on-year terms, new home prices rose in all of the 10 cities last month. The pace was quickest in Beijing, at 19.75 per cent, and slowest in Chengdu, at just 0.02 per cent. The combined area of new homes sold in the 10 cities fell to 7.7 million sq metres from 9.5 million sq metres in May. New home transactions in Shanghai more than doubled in volume from May to 1.3 million sq metres. However, the volume in Tianjin dived to 601,000 sq metres from 1.4 million sq metres, and in Chengdu new home sales plunged to 450,000 sq metres from 2.2 million sq metres.
