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Shanghai home prices rise in first half

INADEQUATE supply coupled with rising demand from both individual buyers and investors has pushed up home prices in Shanghai in the first six months of this year while investment in real estate development continued to drop, a senior government official said today.

New property prices stood at 13,918 yuan (US$2,037) per square meter on average between January and June in the city, an increase of 2.8 percent compared with the average price in the same period last year. Meanwhile, second-hand properties were sold at 11,793 yuan per square meter during the same period, up 9.1 percent from the 2008 average, Liu Haisheng, director of the Shanghai Housing Guarantee and Administration Bureau, said at a municipal conference today.

``The problem of insufficient supply of both new and existing homes has become notable in the first half of this year amid growing demand,'' Liu said. ``In particular, the number of home buyers from other provinces as well as overseas has picked up significantly since mid April.''

Supply of new homes, excluding those designated for relocated residents under urban redevelopment plans, reached 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 statistics released by E-House (China) Holdings Ltd.

However, 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 said, citing information from the Shanghai Statistics Bureau.
In terms of investment, however, a total of 62.4 billion yuan was thrown into real estate development in the first six months in Shanghai, a year-on-year decline of 3.1 percent.

To ensure a healthy housing market, the city government will further accelerate its pace in the development of large-size residential communities in the second half of this year to build more affordable housing for mid to low-income families.

Under an earlier released government plan, 15 large-size residential communities - six designated for budget homes and nine for mid to low-priced ordinary houses - will be established across the city over the coming years.

Moreover, the industry watchdog will also introduce more land plots for residential use to help raise home supply, Liu said.


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