The average cost of new homes hit a record in Shanghai last week despite weak buying sentiment, market data showed.

The price of new homes sold across the city rose 7.6 percent to 40,442 yuan (US$6,207) per square meter on average during the seven-day period ended on Sunday, exceeding the 40,000 yuan per square meter threshold for the first time. But the area of new homes sold dived 40.2 percent from the previous week to 160,700 square meters, Shanghai Homelink Real Estate Agency Co said in a report yesterday.

“The weekly average price of new homes surged to the highest last week mainly due to robust sales registered in the high-end segment, indicating that the recent tightening measures to cool the city’s overheated market were having a bigger impact on home seekers with a comparatively tight budget,” said Lu Qilin, director of research at Shanghai Homelink.

Five of the 10 bestselling housing projects in the city last week cost above 50,000 yuan per square meter, while 35 residential units priced at over 100,000 yuan per square meter were sold, a week-on-week rise of 16.7 percent, a separate report released yesterday by Shanghai Centaline Property Consultants Co showed.

“The notable fall in weekly transaction volume was no surprise and the sluggish sentiment might extend further in the local market as policy-driven correction continues,” said Lu Wenxi, a senior research manager at Shanghai Centaline.

Last week, 349,000 square meters of new houses, mostly medium to low-end projects, were released locally, a weekly gain of 1.7 percent, Homelink data showed.

“However, as new home supply remained quite abundant over the past two weeks, we do expect a market rebound though it might not be very strong or last very long,” Centaline’s Lu said.

(Source: ShanghaiDaily  Author: Cherry Cao)