Research report contradicts 0.2pc decline in official figures
Yvonne Liu and Denise Tsang Sep 06, 2008
Prices of new homes in Shanghai dropped 24 per cent in July, the steepest month-on-month decline since July 2005, according to a report in Shanghai Securities News.
The property report by an “authoritative market research institution” said prices of new homes fell 24 per cent from June, in direct contrast with official figures that showed prices declined by only 0.2 per cent during the period, the newspaper reported yesterday. The paper did not name the research institution.
In terms of volume, sales of new apartments in July dropped 32 per cent from the previous month and 69 per cent from a year earlier, the paper cited the report as saying.
The performance of high-end residential properties in downtown Shanghai remained stable during the first half, but the number of transactions began declining in July.
Sales volume of residential units ranging in size from 150 to 200 square metres in the downtown area plunged 50 per cent in July from a month earlier.
According to transaction figures from Centaline (China), total sales of new homes in Shanghai dropped 1.5 per cent to 1.28 million sq metres last month from 1.3 million sq metres in July.
“Daily transactions ranged from 120 to 150 in the last two months, compared with 300 to 400 deals for the same period last year,” said Kevin Chen Ning, director of the research and consulting department at Centaline (China).
However, the firm’s data shows the average price of a new home slid by only 7.14 per cent to 13,000 yuan (HK$14,866) per square metre in July from 14,000 yuan per square metre in June.
Prices of secondary homes were stable in the first quarter compared with the prices of new homes.
However, Mr Chen said prices in the secondary market had been dropping significantly since June.
According to Centaline (China)’s property price index, a gauge measuring the average transaction price of 1,000 housing estates in the secondary market, residential prices dropped 0.89 percentage point from May to July.
Mr Chen said property prices in Shanghai may drop 15 to 20 per cent by year-end, as developers continued to cut asking prices in an attempt to lure cautious homebuyers.
Adrian Ngan, executive director of research at CCB International Securities, attributed July’s poor sales to cautious investor sentiment prior to the Olympic Games.
“Many investors took a wait-and-see attitude, and feared a rumoured post-Olympics economic slump would come true,” Mr Ngan said. “Developers, on the other hand, were not actively pushing for sales.”
Following brisk sales last year, primary residential transactions in the city could slump as much as 30 per cent this year on the combined effects of a weakened economy and government anti-speculation measures, he said.
Mr Ngan said projects in prime locations undertaken by reputable developers would be more resilient to the residential real estate slump.
Lehman Brothers economist Sun Mingchun said the sector had fallen victim to a bleak economic outlook and slowing corporate profit growth.
He feared that the property slump could ultimately hurt economic growth and the quality of banks’ property-related assets.
Lee Hing-yin, a director of research and consultancy at Colliers International, said the Shanghai property market was undergoing a period of adjustment, but it was difficult to predict the market outlook at this stage.
1 comment:
Shanghai home prices fall 24pc
Research report contradicts 0.2pc decline in official figures
Yvonne Liu and Denise Tsang
Sep 06, 2008
Prices of new homes in Shanghai dropped 24 per cent in July, the steepest month-on-month decline since July 2005, according to a report in Shanghai Securities News.
The property report by an “authoritative market research institution” said prices of new homes fell 24 per cent from June, in direct contrast with official figures that showed prices declined by only 0.2 per cent during the period, the newspaper reported yesterday. The paper did not name the research institution.
In terms of volume, sales of new apartments in July dropped 32 per cent from the previous month and 69 per cent from a year earlier, the paper cited the report as saying.
The performance of high-end residential properties in downtown Shanghai remained stable during the first half, but the number of transactions began declining in July.
Sales volume of residential units ranging in size from 150 to 200 square metres in the downtown area plunged 50 per cent in July from a month earlier.
According to transaction figures from Centaline (China), total sales of new homes in Shanghai dropped 1.5 per cent to 1.28 million sq metres last month from 1.3 million sq metres in July.
“Daily transactions ranged from 120 to 150 in the last two months, compared with 300 to 400 deals for the same period last year,” said Kevin Chen Ning, director of the research and consulting department at Centaline (China).
However, the firm’s data shows the average price of a new home slid by only 7.14 per cent to 13,000 yuan (HK$14,866) per square metre in July from 14,000 yuan per square metre in June.
Prices of secondary homes were stable in the first quarter compared with the prices of new homes.
However, Mr Chen said prices in the secondary market had been dropping significantly since June.
According to Centaline (China)’s property price index, a gauge measuring the average transaction price of 1,000 housing estates in the secondary market, residential prices dropped 0.89 percentage point from May to July.
Mr Chen said property prices in Shanghai may drop 15 to 20 per cent by year-end, as developers continued to cut asking prices in an attempt to lure cautious homebuyers.
Adrian Ngan, executive director of research at CCB International Securities, attributed July’s poor sales to cautious investor sentiment prior to the Olympic Games.
“Many investors took a wait-and-see attitude, and feared a rumoured post-Olympics economic slump would come true,” Mr Ngan said. “Developers, on the other hand, were not actively pushing for sales.”
Following brisk sales last year, primary residential transactions in the city could slump as much as 30 per cent this year on the combined effects of a weakened economy and government anti-speculation measures, he said.
Mr Ngan said projects in prime locations undertaken by reputable developers would be more resilient to the residential real estate slump.
Lehman Brothers economist Sun Mingchun said the sector had fallen victim to a bleak economic outlook and slowing corporate profit growth.
He feared that the property slump could ultimately hurt economic growth and the quality of banks’ property-related assets.
Lee Hing-yin, a director of research and consultancy at Colliers International, said the Shanghai property market was undergoing a period of adjustment, but it was difficult to predict the market outlook at this stage.
Post a Comment