Can Shanghai absorb 84,000 homes this year amid slowing sales, rising prices?

At least 270 residential developments with some 30,000 units are expected to go on sale in mainland China’s commercial and financial hub this year, on top of the existing inventory of 54,000, according to property agency Baonuo.

“Government incentives may not be enough to fire up new home sales,” said Fu Liuhao, a senior manager with Baonuo. “Most prospective buyers are cautious about the market’s outlook and taking a wait-and-see approach.”

Last year, 57,218 new homes were sold, a decline of 24 per cent from a year earlier, according to data compiled by property consultancy Shanghai UWin Real Estate Information Services. The average price jumped 19 per cent last year from a year earlier to 79,150 yuan (US$10,926) per square metre.

Based on last year’s sales, developers could take more than a year to offload their inventory.