New home prices in Shanghai continued to climb last month while the transaction volume declined for two consecutive months.

The average price of new homes, excluding those designated for relocated residents due to urban redevelopment projects, soared 17.3 percent to 18,502 yuan (US$2,708) per square meter during last month, extending its rally from March, Shanghai Uwin Real Estate Information Services Co said yesterday.

It was also the highest monthly price for new homes ever registered in Shanghai. The previous record was set in June 2008 when new homes were sold at an average of 17,247 yuan per square meter.

"High-end residential properties costing more than 30,000 yuan per square meter accounted for 12 percent of total sales in August compared with about 4 percent in June 2008," noted Lu Qilin, a researcher at Shanghai Uwin. "The majority of high-end homes sold across the city last month cost above 40,000 yuan per square meter, and that helped explain the new record."

Star River, a luxury housing project in Pudong's Huamu area, sold 254 apartments by yesterday at an average price of 50,152 yuan per square meter since the project was launched on August 8.

New home sales, however, dropped by about 14.4 percent to 1.66 million square meters last month, Uwin researchers estimated, based on the data collected between August 1 and 30. The first decline was in July.

Meanwhile, the supply of new homes rebounded by a significant 24.4 percent from July to 1.58 million square meters last month.

"The local supply of new homes is set to remain rather high - around 1.5 million square meters - over the next two months," said Xue Jianxiong, an analyst at E-House (China) Holdings Ltd.

(Shanghai Daily September 1, 2009)