Transactions of new homes in Shanghai rose to the highest in three months last week as an impact from earlier government tightening measures was weakening.

The area of new homes sold, excluding government-subsidized affordable housing, surged 21 percent from the previous week to 395,400 square meters, as the pace extended for the third straight week, Shanghai Homelink Real Estate Agency Co said in a report released yesterday.

“The city’s new housing market recovered notably with outlying districts of Jiading, Songjiang and Minhang registering the most robust sales,” said Lu Qilin, a director of research at Homelink.

However, supply of new homes fell 21.8 percent week on week, with around 195,900 square meters launched to the local market.

“In contrast, new home supply fell for the second straight week, partly because some developers are holding back their plans to release as the city’s red-hot land market is offering them high hopes that home prices will continue to rise.”

New homes were sold for an average of 38,176 yuan (US$5,737) per square meter last week, up 5.8 percent week on week.

Strong sales of medium to high-end houses boosted the weekly gain. Half of the 10 best-selling projects cost 30,000 yuan per square meter and above while 246 homes priced at 80,000 yuan per square meter and above were sold last week, up by 92 units.

The gain was mainly fueled by a Shui On Land development in Hongkou District which sold 112 units last week for an average of above 93,000 yuan per square meter, Homelink data showed.

Meanwhile, a 741-square-meter villa in Changning District was the most costly home sold last week at nearly 130 million yuan, or 175,142 yuan per square meter.

“The high-end market recorded good performance lately as developers actively rolled out their projects as they tap the recovery in sentiment in the market,” said Lu Wenxi, a senior manager of research at Shanghai Centaline Property Consultants Co.

(Source: ShanghaiDaily  Author: Cherry Cao)