ABOUT three months after signing her name on a 2 million yuan (US$315,955) contract to purchase an apartment, 34-year-old Katherine Wu, a human resources manager for a US company in Shanghai, has become what is called fangnu, or mortgage slave.

Although she's happy to be a homeowner at long last, Wu still has a few misgivings about the price she paid. Was it the right time to buy?

"I'm glad I've wrapped up a deal, for better or worse," she said somewhat ruefully.

Wu, a native of Shanghai, began looking for an apartment late last year. In May, she settled on a 90-square-meter apartment in Pujiang Town, one of the rapidly developing residential areas in the outlying district of Minhang, about 17 kilometers from People's Square. She bought the unit off plan and it won't be ready for occupancy until mid-2013.

"I did get a bit fed up with all the mixed signals I was getting from industry experts, economists and media reports about whether the housing market had hit bottom or not," she said of the months she spent searching for a home to buy.

In the end, Wu decided to stop trying to second-guess the market and buy an apartment if she found one she liked and could afford. She dug deep into her own pocket and borrowed some money from her parents for the 50 percent down payment on the unit. Wu started to pay her 20-year mortgage in July.

Nowadays, she's stopped worrying about home price trends and spends her weekends poring through home decorating magazines, dreaming of how cozy her new home will be once she's moved in.

Overall momentum

Wu is typical of many homebuyers in Shanghai who are tired of trying to pick the bottom of the housing market and decided to take the plunge once prices dropped to anywhere near their means. For some, buying now was a hedge against fears that prices would actually rise.

That trend is reflected in June new home sales, which rose 26.6 percent from May to a 17-month high of 1.02 million square meters, according to Shanghai Deovolente Realty Co. The figures exclude government-built affordable housing.

Robust sales were underpinned by strong demand in the middle to high end of the property market with the average sale price rising to a high of 24,071 yuan per square meter.

In July, while new home transactions fell to 859,000 square meters, which was still 11.6 percent up from a year earlier and the second-highest monthly volume registered in Shanghai since February 2011, average price climbed to a record 24,609 yuan per square meter, Deovolente data showed.

"The recent rebound in both volume and average price could be viewed as a signal that overall momentum has been picking up," said Lu Qilin, a researcher at Deovolente.

"The two recent interest rate cuts by the central bank, though mainly implemented to bolster the country's slowing economy, have altered the mind-set of more home seekers, despite repeated vows from the government that it will maintain its property curbs," Lu said.

The State Council, China's Cabinet, announced on July 24 that it was sending eight inspection teams to 16 provinces across the country, including Shanghai and the three other biggest municipalities, to monitor how national measures to control the property market are being implemented.

Across the country, new homes sales in June soared 41 percent from May to 531.3 billion yuan, according to the National Bureau of Statistics.

The number of cities recording a monthly increase in home values also hit an 11-month high.

In the past few months, several local governments in China, beset by diminishing revenue from land sales, have attempted to ease tightening measures by actions such as subsidizing purchases of refurbished homes and allowing first-time buyers to borrow more from public housing funds.

Premier Wen Jiabao and government departments such as the Ministry of Land and Resources, the Ministry of Housing and Urban-Rural Development, the National Development and Reform Commission, People's Bank of China and the China Banking Regulatory Commission have issued repeated pledges of a continued campaign to bring down home prices.

Changing mind-set

Officials have demanded vigorous enforcement of existing crackdown policies that include restrictions on home purchases and mortgage terms.

However, industry analysts said it remains an uphill battle to keep housing affordable.

"The reiteration of existing tightening measures is expected to have a rather minor impact on the market," said Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain in terms of transaction value.

"There are probably no expectations at the moment that these policies, in place for 18 months now, will be relaxed any time soon," Song said. "The major reason behind the current changing mind-set of home seekers is the gradually loosening of credit aimed at stabilizing the overall economy."

China has cut interest rates twice since June to shore up economic growth after gross domestic product slowed to 7.6 percent in the second quarter.

"Interest rate cuts by the central bank and growing concern among potential buyers that home prices may rebound encouraged more people to enter the property market in June, giving rise to higher sales around the country," said Ma Xiaoming, a senior government statistician. "At the same time, the recent decisions by some developers to cancel discounts or even raise prices also contributed to sales increases."

In Shanghai since home sales started to rebound in March, property developers have lost their zeal to offer discounts.

Residential property projects offering price cuts may fall to a six-month low of 197 this month, according to Soufun.com, which operates the country's largest real estate website.

The number of housing developments providing discounts has been hovering above 200 since March, Soufun data showed.

"More than 90 percent of the homes at the project I chose have been sold, and the prices there have remained stable so far," said "mortgage slave" Wu. "Frankly speaking, I don't see much space for home prices to drop further because demand remains high and the economy needs to be bolstered."