New Jiangwan Town has been notorious in Shanghai over the past few years for its rapidly growing land prices.

Land plots designated for home development in that area were auctioned for about 6,700 yuan per sqm in November 2006.

They rose to 12,500 yuan in June 2007 and five months later soared to about 20,000 yuan.

"With a land price of more than 32,000 yuan per sqm, the developer has to build luxury projects on the plot to make ends meet," said Gong Min, a research manager at Shanghai Centaline Property Consultants Ltd.

"However, located between the Middle Ring Road and the Outer Ring Road with no eye-catching selling points, New Jiangwan Town is still immature on the luxury home front."

New home sales in Shanghai jumped to a four-month high in November while average prices rose to 18,686 yuan per sqm, the second-highest monthly average in 2009, according to Shanghai Uwin Real Estate Information Services Co.

In the second week of December, new home prices in Shanghai further soared to a record 22,270 yuan per sqm.