THE average price of new homes soared to a record high in Shanghai during the last month of 2010 amid strong sentiment among buyers particularly for mid- to high-end properties.

New homes, excluding those designated for relocated residents under urban redevelopment plans, were sold for an average 24,176 yuan (US$3,652) per square meter in December, up 7.6 percent from November and a growth of 21 percent from January, according to a report released yesterday by Shanghai Uwin Real Estate Information Services Co, which has been tracking the local new home market since 2006.

Transaction volume, meanwhile, jumped 47 percent from a month earlier to 1.4 million square meters, the highest registered in 2010, Uwin statistics showed.

"The notable rebound in both price and volume in the last month of the year has actually reflected recovering demand from investors rather than end-users," said Lu Qilin, a Uwin researcher. "The local restriction on home purchase, coupled with a highly anticipated introduction of a property tax, are probably major driving forces behind robust sales of mid to high-end homes."

More than 338,000 square meters of new homes, costing above 30,000 yuan per square meter, were sold in the city last month, according to Uwin research. Less than 200,000 square meters were sold in the same period a month earlier.

After the central government unveiled its second round of tightening policies, Shanghai announced in early October - for an definite period of time - that an individual family is entitled to buy only one home. There has also been growing market talk over the last few months of 2010 that Shanghai may trial a property tax on newly-purchased homes as early as this year.