The mayor of Shanghai yesterday said there was no bubble in the city's property market and prices would not fall, with 70 per cent of the population homeowners. At his annual news conference, Han Zheng was asked if the city was suffering from over-building. 'We do detailed analysis and research. In 2001 and 2002, demand and supply were basically in balance,' Mr Han said. 'This year, the supply of commercial apartments will be more than 20 million square metres and people will buy the same amount. 'In addition, there will be trading of 20 million square metres of second-hand apartments. The market is stable and healthy.' In the first eight months of this year, 26 per cent of apartments were purchased by people from outside Shanghai, including those from other parts of China and outside the mainland, he said. This will be the proportion for the full year. With 70 per cent of Shanghai residents homeowners, prices should not fall but nor should they rise too quickly, he said. To obtain this result, the city would use legal, economic and land policies. But the market's structure should change to provide more homes for people on fixed incomes and the poor, Mr Han said. A large proportion of home-owners are those who bought at a cheap price the apartments allocated to them by the state work units in a one-off sale to take the government out of the housing market. While these people have homes, they complain existing prices are far in excess of what they or their children can afford now. In Shanghai's central area, a new apartment begins at 6,000 yuan (HK$5,624) per square metre, while the average monthly income is about 800 yuan. So a 90 square metre unit would cost 420,000 yuan or 44 years' salary for an earner. Prices are rising partly as the city government encourages buyers from Taiwan, Hong Kong, Singapore, South Korea and other countries because it wants Shanghai to be an international metropolis.