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August 22, 2009

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Appraisals of ill-fated flats don't please all

THE owners of apartments in a complex in Shanghai's Minhang District where a 13-story building collapsed in June had mixed reactions to a long-awaited property evaluation that was released yesterday.

The benchmark for final compensation packages was issued by the Shanghai Urban Real Estate Appraisal Co Ltd, which was appointed by the city government to handle the evaluations.

Some property owners said they thought the prices were fair, while others thought they were too low and vowed further action -- including lawsuits if necessary -- to fully recover their investment.

Under the assessment, apartments in the nearly completed building that collapsed in the Lotus Riverside development were valued at between 18,111 yuan (US$2,651) and 21,348 yuan per square meter, depending on the apartment's location. The valuation was based on the market value as of August 13.

The value of the apartments in the 10 buildings that are still standing was set between 15,300 and 19,676 yuan per square meter, based on their value on June 27, the date of the collapse. The company said the government and the property owners had agreed on those appraisals dates.

Gu Yunbiao, an apartment owner in the collapsed building and also a representative of many other buyers, said he was "very disappointed."

"I can buy only a second-hand apartment now if I'm compensated according to the evaluation," said Gu whose apartment on the 11th floor was valued at 19,400 yuan per square meter. "Property prices have risen rapidly in the city."

Gu netted a 28 percent jump in the price since he initially bought the apartment at 15,150 yuan per square meter on March 8. But he will seek higher compensation in future negotiations with the development and said he will sue if he remains unsatisfied.

Other owners told Shanghai Daily that they accepted the evaluation and will settle with the developer as soon as possible.

A buyer surnamed Tao who owns an apartment in one of the unaffected buildings said his flat was valued at about 16,000 yuan per square meter, a price he found "acceptable."

The figures released yesterday reflect market values, said Huang Hetao, a researcher at Century 21 China Real Estate, operator of the city's second-largest brokerage chain.

Some of the owners in the buildings that remain standing apparently fear for their safety or believe their apartments might lose value because of the building collapse, which was caused by unsafe excavation practices and killed a worker who was inside at the time.


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