September 7 -- Transactions of new luxury homes in Shanghai in August fell 24 percent month-on-month to about 30,000 square meters in August, with a total of 123 units transacted, down 21 percent, reports Oriental Morning Post, citing real estate agency Shanghai Deovolente Realty.

The average transaction price of luxury homes in August rose two percent month-on-month to 69,200 yuan per square meter. Two villas costing more than 100 million yuan were transacted.

According to Zhang Jiandong, Deovolente’s Jingan district manager, the fall in luxury home transactions was mainly due to the purchase restrictions which reduced the number of potential luxury home buyers by between 70 percent and  80 percent.

A person in charge of a major agent of luxury homes said developers of luxury homes are facing pressures due to borrowings from banks and private lenders, and are offering discounts of three percent and five percent for some of the new luxury home developments.

Transactions of existing luxury homes fell 23-25 percent month-on-month in August, with discounts of 3-6 percent being commonplace in the existing luxury home market.

A unit that was listed for sale at 28 million yuan was eventually sold for 21.5 million yuan, down by more than 20 percent.

Zhang forecasts transactions of existing luxury homes to rise 20 percent month-on-month in September, with transaction prices remaining unchanged from August and discounts of three percent being offered.

Transactions of new luxury homes will increase 10 percent month-on-month, with buyers being able to obtain discounts of 3-5 percent, added Zhang

Shares of Gemdale Corporation (600383) rose 2.56 percent to close at 6.02 yuan today.