SENTIMENT in Shanghai's housing market continued to be bearish last week while inventory of homes soared to the highest in nearly one-and-a-half months.

Sales of new homes, excluding affordable housing, climbed 6 percent from a week earlier to 99,400 square meters during the seven-day period ended Sunday, but they remained below the 100,000 square meters for a second straight week, according to a research released yesterday by Shanghai Deovolente Realty Co.

The average price dropped 11.8 percent on a weekly basis to 20,776 yuan (US$3,282) per square meter after fewer luxury homes were transacted. Only 3,200 square meters of new houses priced at more than 50,000 yuan per square meter were sold in the city last week, a 40 percent plunge from the same period a week earlier, Deovolente data showed.

Meanwhile, 226,700 square meters of new homes were launched for sale, a weekly jump of 73.3 percent.

"The city's housing market won't rebound any time soon as government austerity measures are expected to remain strictly in place at least until next year," said Huang Hetao, a research manager with Century 21 China Real Estate. "While home buyers expect large discounts, the majority of real estate developers still seem hesitant to cut prices to boost sales."

Some developers recently offered discounts of over 20 percent at certain developments, he said.

Across the city, new home sales totaled 173,000 square meters during the first 13 days of November, down an annual 44 percent, Shanghai Uwin Real Estate Information Services Co said yesterday.

Unwin data showed that as of yesterday new homes for sale exceeded 9.2 million square meters in the city, a rise of more than 3.2 million square meters from the end of January, when the central government imposed its toughest measures to cool the overheated housing market.