The number of residential projects to be released in Shanghai next month is set to fall 39 percent from this month, with most of the supply being developments in outlying areas.

A total of 37 projects - 29 apartment developments, seven villa projects and one mixed development - are scheduled for sale in June across the city. However, the figure compared with 25 projects launched in June 2010, according to the latest research by real estate website Soufun.com.

About 84 percent of the new supply, or 31 developments, will be sited beyond the city's Outer Ring Road, with a quarter in Qingpu District in west Shanghai, Soufun data showed. Areas within the Inner Ring Road, between the Inner and Middle Ring roads and between the Middle and Outer Ring roads will each have two projects.

"There seems to be a notable decrease in supply next month as some developers continue to hold their plans amid rather sluggish momentum in the local market," said Tang Zhengwei, an analyst with Soufun.

"However, we expect the local supply to grow a bit as time goes by since some of the projects which are slated for May launch might get postponed to June."

Across the city, 112 residential projects may offer discounts to buyers next month, according to Soufun research.

That remains unchanged from this month.

More than three months after the implementation of several austerity measures by the central government, there has not been a significant rebound in the buying momentum.

Weekly new home sales have hovered around 160,000 square meters in Shanghai since mid-April and edged up to 180,000 square meters last week, according to data compiled by Shanghai Deovolente Realty.