28 September 2005

The Shanghai property market

Despite an average fall in prices of 20 to 30 per cent over the past few months, the Shanghai property market is far from being in a slump as some commentators have suggested.

Strong public demand for new and better quality properties has been underlined by solid economic growth, which, in turn, is supported by the rapid development of the city's higher value-added services sector.

The present price correction, apparently triggered by government measures to clamp down on excessive speculation, may seem too swift and sharp to those used to the double-digit annual price rises of the past. Indeed, many prospective home buyers are reported to have postponed making a purchase for fear of a further drop in real estate value.

James Leung from China Daily reports.