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Chen Xiaoyang, an investor from Zhejiang Province, has decided to sell
all of the three apartments she bought in Shanghai last year, even if she
could make more money should the city's property prices rise even further
than they have over the past three years.
Chen is eager to quit the city's housing market
over concerns that government policies could bring an end to the
spate
of price rises.
She is not the only person in Shanghai to have made such a decision.
Sales of second-hand apartments increased by 15 per cent in the city after
the People's Bank of China raised the housing loan rate on March 17th,
according to statistics from the Shanghai Branch of Midland Realty, a Hong
Kong-listed property agency.
This followed hot on the heels of steps taken by the Shanghai municipal
government to curb property speculation and increase the supply of medium
and low-priced housing.
On March 7, the local government introduced a capital gains tax of 5.55
per cent on homes being sold within a year of their purchase.
Analysts said this measure was taken to discourage
speculative
investment, seen as the major reason for the city's rocketing house
prices.
Such is the surge in prices, that many local residents have complained
that it is now almost impossible for them to purchase apartments in the
city.
The average price of local residential buildings
was 6,385 yuan (US$772) per square metre in 2004, a year-on-year increase
of 14.6 per cent, while the average per capita disposable income
of the Shanghainese
only increased 12.2 per cent over the same period, according to official
statistics.
Li Xu, an analyst at the city's Hanyu Property Agency, pointed out that
price rises in downtown Shanghai are actually much greater. Prices of
prime location apartments surged more than 20 per cent in the first two
months of this year.
Property prices rose by a national average of 10.8 per cent
year-on-year in the fourth quarter of 2004, accelerating from an 8.6 per
cent gain in the previous three months, government figures showed.
Excessive demand relative to the local housing supply is the real
reason for the high prices, said local property experts.
A total of 32.33 million square metres of new apartments were under
construction in 2004, while only 30.76 million square metres of housing
has been completed.
Industry insiders said
the situation became worse as speculators swarmed into the city in
the hope of benefiting from Shanghai's real estate boom.
(Agencies) | 
Updated: 2005-04-07 11:33
