He said property demand in the city would continue to grow along with infrastructure and economic development.

'Housing demand is strong, and the influx of foreigners doing business in Guangzhou will fuel the need for offices and other properties,' he said.

'The infrastructure developments will also involve large-scale resettlement of residents, which will increase housing demand further.' Last year, the average living space in Guangzhou was 96 sq ft per person, and the city intends to raise the average to 129 sq ft by the year 2000, according to Mr Ou.

Guangzhou aimed to build 53.8 million sq ft of residential properties a year, but the average had been only about 37.66 million sq ft in recent years.

Mr Ou said the municipal government would continue to use foreign capital to help develop its real estate market.

It was striving to perfect regulations and improve management to ensure better protection of investors and developers.

The government was also determined to resolve the problem of unlawful property developments.

In the first nine months, properties under construction covered 167.31 million sq ft, up 56.7 per cent on the same period last year.

Completed properties in the period amounted to 20.87 million sq ft, an increase of 120 per cent.

But Mr Ou conceded that sales of properties saw an increase of only about five per cent, compared with last year's sales, reflecting a slower growth rate, because the average annual growth was about 10 to 15 per cent.

The slower growth was due to developers bringing forward their property sales at the end of last year after Beijing announced plans to implement land appreciation tax.

On the proposed tax - expected to be officially announced by the central government shortly - Mr Ou said the Guangzhou government would adopt a flexible approach to implement the policy to ensure the interest of developers who had already committed to projects.

He said Beijing had taken into account public views to make certain amendments on the proposed levy, which he believed would be acceptable.

Guangzhou was also drafting new regulations on real estate management including the monitoring of resale for unfinished properties.

Another speaker, Jin Yiguo, an official from the Guangzhou Lands Bureau, said the city had generated 4.5 billion yuan from land leasing between 1992 and the middle of this year, which had been used to finance the overall development of Guangzhou as an international city.

He said the city would maintain an organised land leasing system and had formulated a standard land price mechanism to streamline the sale of land.

The seminar was organised by Pearl River-Hang Cheong Real Estate Consultants of Guangzhou and the University of Hong Kong.