Weekly sales of new homes dropped below 100,000 square meters again in Shanghai last week as wait-and-see sentiment prevailed among home seekers.

Sales of new homes, excluding affordable housing, plunged 32.4 percent from a week earlier to 93,800 square meters during the seven-day period ended Sunday, according to a research released yesterday by Shanghai Deovolente Realty Co. The average price jumped 21.8 percent to 23,560 yuan (US$3,728) per square meter, skewed by a larger proportion of high-end homes being sold.

"The tumble of new home transactions last week was an indication that wait-and-see momentum has been capturing more potential buyers after some developers have recently slashed prices to trigger property sales," said Lu Qilin, a researcher with Deovolente. "Obviously, there is going to be a tug-of-war between developers and home buyers."

While overall home sales remained sluggish across the city, those offering notable discounts continued to register robust sales.

Coastal Palace, a China Overseas Property (Group) Co development in Pudong, for instance, sold 104 apartments last week, the most in the city, according to Shanghai Uwin Real Estate Information Services Co. Average price for the project stood at 17,653 yuan per square meter, compared to the previous level of around 22,000 yuan.

The project is among the few that has captured local newspaper headlines after its developer cut prices by more than 20 percent to trigger sales, prompting anger among those who purchased its apartments earlier.

Similar episodes have been reported in at least two other projects in the city in outlying Jiading District as well as Beijing and Hangzhou City, where housing developers, pressed by a financial crunch and a sales slump, have moved to spur sales.

"As the country's rein-in policies will remain in force for some time, home transactions won't likely be boosted unless notable discounts can be offered by more developers," said Huang Zhijian, chief analyst with Uwin. "The general expectation for the residential market has already changed with more and more people anticipating a rather significant price cut."

New home sales rebounded 46.3 percent from the previous seven-day period to 138,700 square meters in Shanghai during the last week of October, after a few real estate developers started to slash prices by up to 30 percent.

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