Shanghai's luxury residential sales market was sluggish for the second straight month due to high prices and a drop in supply.

A total of 64,000 square meters of new luxury homes costing more than 40,000 yuan (US$5,856) per square meter were sold across the city in October, an increase of 4.9 percent from September, according to research released yesterday by Shanghai Uwin Real Estate Information Services Co.

That was less than half the volume registered in August, when more than 140,000 square meters of new homes with a price tag of above 40,000 yuan per square meter changed hands.

However, the average price of high-end homes climbed to 63,477 yuan per square meter last month, up 2.4 percent from a month earlier.

"The average price of luxury houses has remained well above 60,000 yuan per square meter in Shanghai for two straight months," said Lu Qilin, a Shanghai Uwin researcher. "More developers are asking for above 100,000 yuan per square meter for some units, which was unimaginable six months ago."

Nearly 20 projects on both sides of the Huangpu River are seeking more than 100,000 yuan per square meter for some units, according to E-House (China) Holdings Ltd statistics.

More than 90 percent of the city's luxury residential projects have seen sales slow since September with most selling less than 10 units each month, said Xue Jianxiong, an E-House analyst.

A drop in new supply also led to the decline in volume last month, Uwin said.

Three new luxury residential projects were introduced in October, compared with nine in September.