SALES of existing homes dropped to a five-year low in Shanghai last month and more than half of the transactions involved properties that were sold at not more than 900,000 yuan (US$142,630).

A total of 4,200 previously occupied units, mainly houses, were sold across the city in January, the lowest monthly transactions recorded since 2007, according to data released yesterday by Century 21 China Real Estate.

The sales marked a fall of 45 percent from December and a plunge of 80 percent from same month a year earlier.

"The significant retreat was mainly a result of the Spring Festival holiday but it was still a record low volume if we compared it to figures in the same period in previous years," said Eric Luo, an analyst with Century 21. "However, we expect the local market to pick up gradually in coming months."

Data from Century 21 showed that over the past few years there were sales of between 5,000 and 8,600 units of second-hand homes in the month in which the Spring Festival fell.

The second-hand homes costing not more than 900,000 yuan comprised 51 percent of the total sales while those from 900,000 yuan to 2 million yuan took up 34 percent of the total.

Shanghai Centaline Property Consultants Ltd said that overall purchase deals involving second-hand homes sealed at its branches fell 42 percent in January from a month earlier.