SALES of new residential properties rose by more than one third in Shanghai in the first half of this year, a sign of recovering sentiment among buyers despite austerity measures to rein in housing speculation remaining in place, the Shanghai Statistics Bureau said today.

The city, meanwhile, saw declines in both homebuilding starts and completions, posing risks for inadequate supply in the future.

Between January and June, purchases of new residential properties totaled 9.53 million square meters across the city, a year-on-year growth of 35.5 percent. For properties of all types, transactions surged 39.5 percent to 11.07 million square meters during the six-month period, the bureau said.

On the supply side, however, groundbreaking on new homes fell 13.2 percent year-on-year to 7.86 million square meters, while construction was completed on some 6.68 million square meters of new housing, an annual decrease of 5.8 percent.

Investment in real estate development -- covering all property types -- rose 21.7 percent to 126.8 billion yuan (US$20.5 billion) in the first six months of this year, a rise of 9 percentage points from the same period a year ago.

Investment in residential properties jumped 9.5 percent to 72.56 billion yuan, while for offices and retail buildings, it totaled 18 billion yuan and 15.77 billion yuan, up 88.9 percent and 29.5 percent, respectively, from the same period last year, according to the bureau.