PURCHASES of new homes in Shanghai last week rose to the highest in eight weeks, a reflection the housing market is rebounding, according to market data released yesterday.

Over the last seven days the sales of new homes, excluding government-funded affordable housing, surged 68.3 percent from the previous week to 140,400 square meters, according to a report by Shanghai Deovolente Realty Co.

They were sold for 19,490 yuan (US$3,093) per square meter on average, a drop of 5.7 percent from the week earlier, after developers trimmed prices.

"Homebuying sentiment extended the rally for the fourth straight week in the city amid a notable improvement in demand for low to mid-end apartments after developers cut their prices," said Lu Qilin, a researcher at Deovolente. "That's why the average price also fell below the 20,000 yuan per square meter barrier again after staying above the level for three consecutive weeks."

New houses in eight of the city's 10 best-selling residential projects were sold for under 20,000 yuan a square meter, accounting for two-thirds of the total transactions recorded last week in Shanghai, Deovolente data showed.

"Demand is getting a boost as more homes become available, and the trend is poised to continue over the next two months," said Huang Hetao, a research manager at Century 21 China Real Estate.

"From next month, more houses are expected to be released to the local market as developers may want to cut their inventory in March and April, a traditionally good period for home sales in the country."