Buying sentiment for new homes continued to be sluggish in Shanghai last week despite slight increases in the transaction volume and prices.

Sales of new homes, excluding those built under the city's affordable housing programs, rose 11.5 percent to 70,000 square meters last week, Shanghai Uwin Real Estate Information Services Co said yesterday. The average price climbed 4.5 percent to 22,962 yuan (US$3,495) per square meter.

"The latest restrictive policies launched by the central government since the end of January have affected buyers' momentum significantly," said Huang Zhijian, chief analyst at Uwin. "Our data show that transaction volume of new homes have plunged more than 45 percent in Shanghai between February 1 and Sunday compared to same period a year earlier."

Yanlord Townhouse, a luxury residential project in New Jiangwan Town, northeastern Yangpu District, continued to sell strongly last week with 13 units being sold for an average 75,381 yuan per square meter. During the previous seven days 11 homes were sold, according to Shanghai Deovolente Realty, an agency focuses on high-end housing.

Meanwhile, Tomson Riviera, the city's most expensive apartment project located in the heart of Pudong's Little Lujiazui, also sold a 434 square-meter unit last week at an average 140,476 yuan per square meter, according to Deovolente's statistics.

An inadequate supply of luxury homes and demand from wealthy buyers could have lifted the robust sales of luxury homes in the city over the past few weeks.

The annual Shanghai Spring Real Estate Exhibition, which closed on Sunday at the Shanghai Exhibition Center, drew 45 local developers who offered about 60 projects for sale, a sharp drop from a year earlier.