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Demand, less stock lift prices

AN inadequate supply and rising demand from both individual buyers and investors have propelled home prices to rise in Shanghai in the first six months this year while investment in real estate development continued to drop, a senior government official said yesterday.

The average price of new properties stood at 13,918 yuan per square meter between January and June in the city, an increase of 2.8 percent compared with the average price last year. Meanwhile, existing properties were sold at 11,793 yuan per square meter during the same period, up 9.1 percent from last year's average, Liu Haisheng, director of the Shanghai Housing Guarantee and Administration Bureau, told a municipal conference yesterday.

"The problem of insufficient supply of both new and existing homes has become notable in the first half this year amid growing demand," Liu said.

"The number of home buyers from other provinces and regions as well as overseas has picked up sharply since mid April."

Sales of new houses jumped 35 percent to 14.43 million square meters while existing properties sold during the same period soared 61 percent to 11.75 million square meters, Liu told the conference, citing information from the Shanghai Statistics Bureau, which hasn't released the figures yet.

The supply of new homes, excluding those designated for relocated residents under urban redevelopment plans, came to 5.45 million square meters in Shanghai in the first six months, compared with 6.23 million square meters in the same period a year earlier, according to market research by E-House (China) Holdings Ltd.

Investment in real estate development, however, continued to fall. A total of 62.4 billion yuan was pumped into real estate development in the first half this year, a drop of 3.1 percent from a year earlier, Liu said.

To ensure a healthy market, the city said it will offer more land in the second half while speeding up building budget homes and developing 15 large residential communities.


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