[photopress:real_estate_new_Shanghai_mansion.JPG,full,alignright]The China Academy of Social Sciences (CASS) said in a report recently published that residential property in this economic hub could soon be in short supply if the growth of investment by developers continues to slow.
The 2008 China Property Market report showed that of the 70 cities surveyed, Shanghai last year recorded the lowest rate of property investment growth.
Developers invested RMB130.7 billion($18.7 billion) in the Shanghai property market last year, up 2.5% on 2006. However, the national growth figure was 31.8%.
CASS said if the growth rate remains low, there will be a shortage of houses, which will in turn lead to further price increases.
Over the past 12 months, property developers have been hit by a series of negative factors, including government measures to regulate land sales, reduce credit and provide more affordable homes.
At the same time, the wait-and-see attitude of consumers has made many house builders reluctant to launch new projects.
Shao Minghao, a researcher with Hanyu Property Agency, said he expects Shanghai property prices to continue to grow steadily in the near future.
He said, ‘But the rate of growth will be slower than before. The government doesn’t want property prices to grow at a faster rate than average salaries.’
Source: China Daily