Shanghai's new housing market posted sales of over 78 percent last week although the average price fell.

The area of new homes sold, excluding government-subsidized affordable housing, soared 78.1 percent week on week to 505,700 square meters, the highest seven-day volume registered in about eight months, Shanghai Homelink Real Estate Agency Co said in a report released yesterday.

The mean cost of these new homes fell 5.6 percent to 33,853 yuan (US$5,195) per square meter, Homelink data showed.

"The local housing market could be called overheated with weekly transactions exceeding 500,000 square meters," said Ke Xiaojuan, a Homelink researcher.

"Notably, interest in the medium to low-end segment was particularly strong as seven of the 10 most popular projects cost no more than 30,000 yuan per square meter."

A high-end Shui On Land project with average price exceeding 75,000 yuan per square meter in downtown Hongkou District continued to lead with weekly sales of 171 apartment units, according to Homelink data.

The luxury segment where units cost an average of more than 80,000 yuan per square meter saw 117 units sold last week, up 39 units from the previous seven-day period. More than 40 percent of these luxury units were located in Minhang District and the Pudong New Area, Homelink said.

As of yesterday, Shanghai's supply of new homes available for sale barely surpassed 9 million square meters, or around 58,400 units, according to the city's official real estate website fangdi.com.cn.