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Bill Savadove

Cooling measures are putting a brake on residential prices in Shanghai

Shanghai has released figures which, officials say, signal a slowdown in the property market in the first half of this year.

But industry executives said some sectors remained strong.

In the first six months, residential housing prices rose 19.8 per cent year on year, the Shanghai Statistics Bureau and the Shanghai Housing and Land Resources Administration said in separate reports. The average price was 5,135 yuan per square metre.

In the second quarter, residential prices gained 19.4 per cent, against rises of 20.1 per cent in the first quarter and 28.9 per cent in the fourth quarter of last year.

'Residential sales prices are still rising, but the trend of excessively rapid rises in property prices is under effective control,' the administration said.

Investment in  property development rose 20.4 per cent in the first half of this year to about 50 billion yuan.

Although the growth figure is little changed from last year, when property spending rose 20.3 per cent to more than 90 billion yuan, the government said it was directing more funds to low-cost housing.

Property sales, as measured by area, rose 17.5 per cent in the first half to 8.8 million square metres. Of the total, residential property sales rose 14.2 per cent to 7.9 million square metres.  Property sales, in both residential and commercial sectors, grew 20.5 per cent last year.

A domestic property company executive said several residential projects, located on the outskirts of the city, aimed at low-income families had come onto the market, slowing the overall rise in prices.

'In general, prices are slowing. But in some areas, like the city centre, prices are still rising,' he said.

In the wake of a land scandal last year and government moves to slow the economy since April, Shanghai has implemented several policies to cool the property market. Steps include limiting land sales, banning the transfer of unfinished apartments and tightening credit to developers.

As the market has slowed, the number of households relocated to make way for property development has also fallen. In the first five months of this year, Shanghai moved 15,000 households, down more than 50 per cent.



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