Shanghai Daily news

New housing prices in Shanghai rose at the slowest rate in 18 months last month, indicating that the galloping property market is likely to brake this year.
The benchmark of the city's new housing prices, the Shanghai Housing Index, grew 0.45 percent in January, the Shanghai Real Estate Index Office reported yesterday.
By comparison, the index rose 33 percent in 2003.
Excluding seasonal adjustment during the Chinese lunar New Year, growth in the city's new apartment market slowed last month, the report said.
"Most developers chose to rest during the Spring Festival holidays after achieving lucrative profits last year," said He Xiaocheng, a researcher at the Shanghai Real Estate Index Office. "Some new residential projects also had slower sales during the period."
In addition, some investors are waiting for definite rules on real estate trading and are choosing to sit tight at the moment, He said.
The Shanghai government is drafting restrictions on uncompleted housing transfers. The approaching rule has curbed trading in the sector.
Tan Baiqiang, general manager of Shanghai Centaline Property Agency Co Ltd, said the government's new rule will probably put limit on apartment trading within one year of the pre-sale contract being signed.
"In the short term, that policy may lower prices of uncompleted apartments on the second-hand market," Tan said. "Some home owners are cashing out to avoid possible financial risks."
The unified property tax, which is also in the pipeline, has restrained some investment, as it will raise investors' management costs.
Centaline forecast moderate growth for the whole year.
Shanghai's real estate market has been surging for more than three years since November 2000. Prices and investment volume have both reached a high level, which poses risks for investors, said Zhang Hongming, a real estate expert at the Shanghai Academy of Social Sciences.
Zhang said the ever-growing new housing supply has caused a decline in prices and rentals of existing apartments and cut investors' profit margins.
According to an independent report from Centaline, prices of existing mid- and high-end apartments fell 1.96 percent to 8,282 yuan (US$998) a square meter last month. Pudong and Hongkou districts had the largest adjustment in trading during the period.
Among the 166 residential projects tracked, those priced below 5,000 yuan a square meter were most active in the past month, the report said.
Also catering to the city's wage earners, budget homes of a total 9 million square meters will hit the market in three years.
The large amount of apartments priced between 3,000 to 3,500 yuan is expected to ease demand from families at economic disadvantage.