BUYING momentum among home seekers continued to recover in Shanghai last week amid increased supply.

Sales of new homes, excluding government-funded affordable housing, climbed 27 percent from a week earlier to 83,400 square meters, extending strength for the third straight week, according to research released yesterday by Shanghai Deovolente Realty Co.

New home supply, meanwhile, surged 207 percent week-on-week to 117,600 square meters, the highest release recorded this year, Deovolente data showed.

"While home sales climbed steadily over the past few weeks, the overall sentiment was still very sluggish as it remained below the 100,000-square-meter weekly barrier," said Lu Qilin, a researcher with Deovolente. "Most of the best-selling projects last week are located in outlying areas with a price tag of no more than 2 million yuan (US$317,965)."

The average price of new homes stood at 20,666 yuan per square meter last week, an increase of 0.98 percent from the previous seven-day period. Some 3,900 square meters of luxury houses, costing more than 50,000 yuan a square meter, were sold across the city, a weekly increase of 39 percent.

As of yesterday, new home sales reached 168,000 square meters in the city, a decline of 11 percent from same period a month earlier, according to data released by Century 21 China Real Estate, operator of the city's largest estate chain in terms of outlet numbers.

"The upcoming cut in banks' reserve requirement ratios serves as the latest signal from the government for a mild easing in monetary policies and could be somehow regarded as good news for the real estate market," said Huang Hetao, a research manager with Century 21.

China's central bank announced over the weekend that it will lower the reserve requirement ratio for banks by 0.5 percentage points starting this Friday, a latest attempt to ensure liquidity and economic growth amid a grim global outlook.