Shanghai saw a nearly 27-percent tumble in transaction volume of second-hand homes this year while average sale prices edged up 2.6 percent, a leading industry research body said on Monday.

Around 131.6 million square meters of used apartments changed hands in the city in 2008, or a year-on-year drop of 26.9 percent, according to the research department of Shanghai Centaline Property Consultants Ltd, operator of the city's largest real estate agency chain.

"A low sentiment among home buyers characterized by a wait-and-see attitude has led to the lackluster performance in the city's second-hand home sales market," said Ma Ji, head of the research department at Shanghai Centaline. "The second half encountered extremely hard times with total volume accounting for only half of those reached in the first six months."

Across the city, Minhang, Pudong and Baoshan districts led in transaction volume this year, taking a combined market share of nearly 40 percent.

Low to mid-end apartments have taken a lion's share in total deals transacted, Centaline figures showed. For instance, apartments costing no more than 800,000 yuan (US$116,960) accounted for about 70 percent of the total transactions whereas homes worth more than 3 million yuan only grabbed a 3-percent market share.

Moreover, about 50 percent of used apartments sold in the city in 2008 are smaller than 70 square meters, and those between 70 and 90 square meters accounted for 20 percent, Centaline said.

However, the city's leasing market showed a rather different story, as more home owners decided to lease out their properties rather than sell them.

"The leasing market remains rather stable in 2008 as compared to the sales market," Ma said. "Transaction volume jumped 30 percent from 2007 mainly due to increased supply."

However, the average rent for used apartments fell 4.7 percent during the period as landlords had to cut rents to attract tenants.

In particular, Pudong New Area, Putuo and Zhabei districts saw the most active deals during the 12-month period when 5,223, 3,257 and 2,310 units of used apartments were leased, respectively.

For 2009, Centaline said it expects transaction volume for sales of second-hand homes to jump 15 percent from 2008.

(Shanghai Daily December 30, 2008)