The Shanghai government has said it hopes to merge the commercial property markets for foreign and domestic buyers next year. The proposal was part of the city's policy to attract further foreign investment into the property sector. Municipal land bureau officials said the city had seen strong demand for real estate developed by Hong Kong businesses and wanted to attract more investment from them. The city merged the residential property markets for local and foreign buyers in August to widen the choice for overseas investors. The land bureau officials said the government would also stimulate development of the secondary property market and ensure sufficient land supply to avoid an 'over-rapid' property price rise. The city's Housing, Land and Resources Administration Bureau director Cai Yutian said the government aimed to have the secondary market grow to about the same size as the primary market in three years. 'Shanghai would kick-start the secondary market development to become a mature market,' Mr Cai said. He said the government and banks were working out ways to nurture the secondary market together - by offering mortgage loans, tax rebates and lower loan interest rates to home buyers. The authorities would also maintain the land supply next year at about the same level as this year to ensure a 'healthy' market development, he said. The government projected the city's property sales would reach more than 15 million square metres of floor area in the primary market this year and 10 million square metres in the secondary market. 'We will ensure that a property price rise would not run out of control to adversely affect the market,' Mr Cai said. Shanghai's average property price rose 5 per cent year on year in the first nine months. The property market suffered a glut three years ago, with an excess of 10 million square metres. That was reduced to five million sq m by the end of last year. Shanghai's property development has so far absorbed US$10.3 billion of foreign investment. The SAR has accounted for 70 per cent of the total.