New home sales remained sluggish in Shanghai for the third straight month in July, while prices remained stable. Some projects offering discounts are seeing a considerable jump in sales.
Sales of new homes in Shanghai climbed 2.4 percent from June to 430 thousand square meters. That's less than a quarter of the transactions recorded in the same period last year. Average housing prices edged up a little, but remained basically unchanged at 19 thousand yuan per square meters.
The increase in sales is mostly due to residential projects offering big discounts. A project by developer Vanke lowered its price from 33 thousand to 28 thousand yuan per square meter. Now the development has sold 75 percent of its units. And a project of Green Land is offering a 20 percent discount.
Dong Zhihong, Staff of Green Land Group said "It's selling very well. About 180 to 200 units a month."
The Green Land project saw a change in the type of buyers it attracted. 70 percent are first home buyers, aged between 25 to 35 years old.
Dong Zhihong said "Previously there were 9 investors out of every 10 buyers. Now there is just one investor out of 10 buyers. The majority are owner-occupiers."
Analysts say July's sales figure is evidence that the property market is testing the bottom of the market.
Fu Qi, Real Estate Analyst said "The price drop has been accepted on the demand side. It's testing the bottom price of the market."
A survey shows among the city's 250 residential projects currently for sale, 110 are offering discounts, up from just 49 in June.