Buying sentiment for new homes continued to be strong in Shanghai last month and the average price also remained high, according to a leading real estate agency.

Sales of new homes, excluding those designated for relocated residents under urban redevelopment projects, edged down slightly from September's 1.48 million to 1.47 million square meters in October, Shanghai Uwin Real Estate Information Services Co said yesterday.

The average price of new homes dipped to 16,780 yuan (US$2,456) per square meter last month, down by merely 0.65 percent from September.

"Across the city, about 300 residential developments registered a month-on-month price increase between September and October," said Lu Qilin, a researcher at Shanghai Uwin.

"Among them, nearly one third rose by more than 10 percent. Meanwhile, about 160 new housing projects suffered a decrease in prices."

Lu explained that the monthly dip in the average price was primarily due to more homes in suburban areas being sold during the period.

Uwin statistics showed that nearly 80 percent of new homes sold in the city last month, or 1.15 million square meters, are located beyond the Outer Ring Road, compared with about 60 percent in previous months.

Analysts attributed an inadequate supply of new homes as the major reason behind the current strong market momentum.

There were only about 1.26 million square meters of new housing projects for sale last month, compared with 1.5 million square meters in September and 1.58 million square meters in August.