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Slight rebound seen in Shanghai property market

07-19-2012 11:35 BJT

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After months of lack-lustre performance, the housing market there is experiencing a slight rebound.

The statistics bureau’s month-on-month data show that Shanghai’s new home prices rose 0.2 percent in June, breaking eight straight months of decline. But despite the slight rebound in home prices, analysts say it is unlikely they will rise significantly due to government purchase restrictions and the great amount of inventory remaining in the market.

Huang Zhijian, founder&CEO of Shanghai Uwin Real Estate Info. Services, said, “Smaller sized apartments are for people who really need to buy homes, so they will be the first to rebound, and there’s a chance of rising prices there, but the supply of bigger apartments is still in excess of demand, and developers are in need of cash, so there’s nothing driving those prices to go up.”

In June, more than 1 million square meters of new homes were sold in Shanghai, a high since the latest round of policies curbing the property market were implemented last January. According to the real estate web site Soufun, just last week more than 1,700 new homes were sold, unusually high for July. The most popular types were small-to-medium-sized apartments tailored to first-home buyers.

Huang Zhijian said, “New homes smaller than 100 square meters were really popular last month, so it should take less than 7 months to absorb the stock, normally it will take seven or eight months for supply and demand to meet. The inventory of smaller apartments beyond the inner ring road is quite tight, but really expensive apartments inside and outside the inner ring road are still in excess of demand.”

Analysts expect developers will continue to offer discounts on newly built homes in order to boost sales revenue and to ease their tight cash flows.

Editor:Wang Xiaomei |Source: CNTV.CN

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