NEW home sales rebounded in Shanghai last week as nearly 60 percent of the offerings now cost less than 20,000 yuan (US$3,226) per square meter.

The purchases of new residential properties, excluding government-subsidized affordable housing, jumped 20 percent to 215,900 square meters during the seven-day period ended Sunday, Shanghai Deovolente Realty Co said today.

Average price of new homes, meanwhile, fell 11 percent week-on-week to 21,849 yuan per square meter. About 57.5 percent of the new houses sold last week cost less than 20,000 yuan per square meter, compared with 53.1 percent a week earlier, the agency said.

On the supply side, more than 382,000 square meters of new homes were released to the local market, a week-on-week surge of 43 percent.

"While supply has outnumbered sales for the fourth straight week in Shanghai, we can still see price hikes at a couple of mid-range and low-end residential developments," said Lu Qilin, research director at Deovolente. "The trend will likely continue in the short term because most developers have sufficient cash and there is no need for them to cut prices at the moment."

Most of the new homes released last week are located in suburbs except a residential development on Xinzha Road downtown which has 11 villas for sale, priced 200,000 yuan per square meter upward.

So far this month, new homes hitting the local market already exceeded 1.13 million square meters but only 737,000 square meters were sold, according to data from Deovolente.