Shanghai's property market reached a new low point in October, two years after the first policies aimed at reining in the nation's overheated market were introduced.

During the week ending October 23, home sales in Shanghai declined 19% week on week to 98,600m2 at an average price of ¥21,247/m2, down 5% from the previous week, according to China Real Estate Information Corp (NASDAQ: CRIC) figures. Eight developments with 161,500m2 in floor space were put up for sale in the city last week, up 9% from the previous week.

In the first three weeks of October, new home sales in Shanghai totaled just 302,700m2, marking a substantial drop of 72% from the same period a year ago, CRIC figures show.

A stringent credit policy and limits on home purchases are the major contributing factors behind the lackluster market, said CRIC analyst Xue Jianxiong.

"With year end approaching, developers have to pay construction workers and pay for materials, and publicly traded ones want to beautify their financial reports; so they would cut prices to get cash," Xue noted. "But some discounts apply to very few apartments in a development and therefore are just a gimmick to attract public attention."

Although there have been widespread reports asserting that Shanghai's property market has reached a turning point, only developments in the city's outskirts and pricy free-standing houses have led the way in slashing prices.

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