While Shanghai's overall housing market remained weak over the past month with substantial drops in both supply and sales, leasing demand for apartments in the city's suburban areas seemed rather strong during the week-long Spring Festival holiday, the city's largest real estate brokerage firm has found.

"Leasing demand proved to be quite robust for apartments located beyond the Outer Ring Road as transactions rose by up to 30 percent compared with the period a year earlier," said Lu Hong, a marketing official at Shanghai Centaline Property Consultants Ltd, which has about 160 branches across the city.

"On the contrary, leasing sentiment for downtown homes remained subdued with significant drops in viewing appointments." Lu added.

Falling rents, together with increasing demand from job-seekers from other parts of the country, helped boost the low-end leasing market, industry officials said.

Centaline figures showed that rents have dipped some 5 percent on average in remote areas of the city where a two-bedroom furnished apartment usually commands 1,500 yuan (US$220) a month, and many of the tenants are from other parts of the country.

The mid to high-class leasing market, where a two-bedroom apartment would cost at least 3,500 yuan a month to rent, is expected to recover as early as the middle this month, said Jin Xiaofeng, head of Centaline's Jing'an District operations.

The same picture is also emerging in the sales market.

More home buyers were interested in apartments between the Middle and Outer Ring Roads during the holiday, a Centaline survey showed.

(Shanghai Daily February 3, 2009)