Sales of new homes in Shanghai rose last month after real estate developers cut prices.

A total of 787,600 square meters of new homes, excluding those designated for relocated residents, were sold last month, a month-on-month increase of 60 percent, according to Shanghai Uwin Real Estate Information Services Co.

New homes sold for an average 12,141 yuan (US$1,777) per square meter last month, a decline of 13.94 percent compared to January.

"Price reductions in residential developments, especially at projects located beyond the Outer Ring Road, did help shore up sales over the past month," said Lu Qilin, deputy head of research at Uwin.

"The sales boom also indicated that new policies introduced late last year by both the local and central governments, mainly including tax and fee reductions as well as favorable loan policies, are gradually taking effect," Lu said.

Daily sales of new homes beyond the Outer Ring Road hovered around 22,000 square meters and 25,000 square meters on average during the second half of last month after average prices fell to 7,880 yuan a square meter from the previous 9,200 yuan, Uwin pointed out.

Statistics from E-House (China) Holdings Ltd also indicated sales of new homes continued to increase over the past five weeks after prices were reduced in mid to low-class residential projects.

(Shanghai Daily March 3, 2009)