Shanghai Daily news

Shanghai's housing prices continued to rise last month amid the government's tightening rules to cool the local housing market.
The benchmark Shanghai Housing Index, which covers prices and sales of new houses and apartments, rose 2.1 percent to 1,429 points in February from a month earlier, said the Shanghai Real Estate Index Office. It was also the highest point since the index was created in 1995. The index stood at 1,195 points at the end of February, 2004.
"The growth in housing prices in February maintained last year's strong runup," said the office. "However, continuous rises in housing prices are not always good."
One reason for the continued rise in prices is that hot funds from other provinces and overseas are flooding into the local real estate market due to low interest rates and speculation over the renminbi's revaluation, the office said.
"Hot money has created negative influences on the local real estate market and relevant government departments have already noticed the phenomenon," office said.
In a bid to curb speculation in the local housing market, Shanghai will impose a 5.5 percent tax on residents who sell their apartments within the first year after purchase. The tax took effect last Sunday.
Experts anticipate that the government is likely to introduce more new tax and financial policies to further cool the housing market.
China should act to control real estate speculation, with possible measures including a tax on properties owned for less than a year and higher lending rates for owners of multiple homes, Shanghai Securities News said, citing Li Deshui, head of the National Bureau of Statistics.
Prices for residential housing in coastal cities have risen "quite obviously" as speculators buy up properties to make a quick profit, Li said.
Shanghai's mortgage lenders also have plans to curb their booming housing loan business.
Separately, Colliers International, a real estate consulting firm, said yesterday it expects a moderate oversupply in Shanghai's luxury residential market in 2005.
The vacancy rate is seen to rise to 18 percent from 11 percent in 2004. The service apartment market will remain bullish amid limited supply, the firm said.