New home sales in Shanghai hit a 16-month high in March when a total of more than 1.5 million square meters of houses, excluding those designated for relocation uses, changed hands, a major research firm said Wednesday.

"This is the highest monthly transaction since November 2007, when 1.37 million square meters of new homes were sold in the city," Lu Qilin, deputy head of research at Shanghai Uwin Real Estate Information Services Co, told Shanghai Daily yesterday. "The rebound was mainly due to pent-up demand being released following the cut in real estate prices amid an industry correction."

The supply of homes soared to 1.25 million square meters last month from 540,000 square meters in February and average home prices rose 8.5 percent from a month earlier to 13,178 yuan (US$1,929) per square meter.

A total of 436 high-end apartments, each costing above 30,000 yuan per square meter, were sold last month in Shanghai while only 83 similarly priced units were sold in February, data released yesterday by E-House (China) Holdings Ltd showed.

"Though the recent sales boom in high-end apartments was mainly due to significant price cuts by real estate developers, the surge was still too fast," warned Xue Jianxiong, an analyst with E-House. "It could indicate that some investors are coming back which may possibly lead to another round of price rises."

Separately, in the city's second-hand home market, more houses were sold last month compared to February, according to a research by the Century 21 China Real Estate brokerage chain. Its branches recorded a 43-percent jump in sales of apartments in March, with notable increases in the mid to high-end sector.

"Apartments between 1 million and 1.2 million yuan a unit accounted for 28.4 percent of total deals last month and those between 2 million and 3 million yuan accounted for 11.4 percent, both the highest since June 2008," said Huang Hetao, deputy head of research at Century 21. "At the same time, (sales of) apartments below 800,000 yuan per unit fell to 28.9 percent, the lowest since June 2008."

(Shanghai Daily April 2, 2009)