Shanghai revised redemption standards for urban relocation at
the end of last month, increasing the minimum reparation fees to
residents in all districts. The move came in response to
continuously surging housing prices, according to the Shanghai
Housing and Land Administrative Bureau.
Compensation in the Class-A region in Jing’an District, which
features high-end office buildings, is the highest in the city at
no less than 7,700 yuan (US$928) per square meter, up 67 percent
from a year earlier.
Compensation in?Pudong New Area’s Class-A region, which
includes the site of World Expo 2010, jumped to at least 5,700 yuan
per square meter, a 36 percent increase from a year earlier.
Average compensation rises in the city’s downtown areas range from
2,000 yuan to 3,000 yuan per square meter, according to the
bureau.
The change will put pressure on property developers, as they
will need to spend more on relocating residents.
“The rules will probably drive some small players out of the
market as the costs of relocation are expected to jump,” said Yang
Zijiang, real estate research director with Fortunite Consulting
Company. “Large developers may also have to debate increasing
housing prices, since they have already been high for a prolonged
period.”
Although reparation fees have jumped significantly, several
residents are dissatisfied with increases that were lower than
expected.
“The compensation fee is not high compared to soaring housing
prices nowadays,” said Qian Guohua, a resident of Zhabei District.
Qian also said that most houses to be demolished are small, so the
fee isn’t enough to cover buying the larger new apartments.
Shanghai’s average new housing price hit 5,381 yuan per square
meter in May, the highest on the mainland. Analysts believe prices
are likely to remain high as demand remains fundamentally
strong.
(eastday.com July 23, 2004)