Investment in property is rebounding in Shanghai despite a crackdown on speculation and a corruption scandal that has brought scrutiny of real estate transactions. During the first nine months of this year, investment in property development in the city rose 6.6 per cent to about 100 billion yuan, the Shanghai Statistical Bureau said. The growth is stronger than the rise of 0.4 per cent in the first half of this year and the 6.1 per cent gain for all of last year. The bureau said overseas funds and investment in commercial - as opposed to residential - property were behind the stronger growth. Overseas investment in Shanghai property development surged more than 86 per cent to 11.9 billion yuan in the first nine months. Investment in commercial property jumped nearly 42 per cent to 12.4 billion yuan, while investment in office property rose more than 8 per cent to 9.6 billion yuan. Investment in residential property, although accounting for the bulk of the total, rose just 1.2 per cent to 66.2 billion yuan for the nine-month period. Shanghai authorities have vowed to curb property speculation, most recently enforcing a capital gains tax and limiting foreign investment in the sector. But the long-running campaign has placed more emphasis on residential housing and analysts say some funds have switched into commercial property. A corruption scandal, which has already caused the sacking of Shanghai party secretary Chen Liangyu , has brought central government investigators to the city amid talk that developers linked to the disgraced leader could be jailed. In a recent report, Jones Lang LaSalle said demand was strong for Shanghai property. 'Regulatory announcements and government probes into real estate scandals grabbed public attention throughout the third quarter in 2006. Yet quietly hiding behind the headlines, Shanghai's property markets have been very active,' it said. Colliers International said demand for luxury residential property remained 'stable' in the third quarter because of limits on supply. Shui On Land said it expected stronger demand in autumn than in summer for units in the second phase of its Lakeville Regency residential development next to the Xintiandi entertainment district.
