NEW home sales fell below the 200,000-square-meter threshold in Shanghai last week.

Purchases of new residential properties, excluding government-funded affordable housing, dropped 17 percent to 180,400 square meters across the city in the seven days to Sunday, according to a Shanghai Deovolente Realty Co report.

The average cost rose 19.2 percent to 24,668 yuan (US$3,979) a square meter, mainly due to comparatively robust sales in the mid to high-end segments.

"While supply remained rather abundant over the past few weeks, buying sentiment seemed to be rather sluggish following extremely strong sales registered in March," said Lu Qilin, a Deovolente researcher. "Price hikes, meanwhile, also hampered some potential buyers from entering the market."

Nearly 270,000 square meters of new houses were released to the local market last week, the third consecutive week that new supply outnumbered sales and stayed above 250,000 square meters.
As of Sunday, new home purchases in Shanghai totaled 521,000 square meters in May while supply during the same period exceeded 751,000 square meters, according to Deovolente data.

New home prices continued to rally in most Chinese cities in April despite a decelerating pace, the National Bureau of Statistics said over the weekend.

In Shanghai, the price of new houses rose 2 percent last month from March, immediately trailing Guangzhou and Shenyang which recorded the biggest increase of 2.1 percent in April, the bureau said.