Home prices to correct a bit in Shanghai
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Housing prices in Shanghai are expected to correct slightly due to stricter policies that were implemented to curb speculation, according to a book released yesterday by the Shanghai Academy of Social Sciences.
The book, which analyzed the city's economic, social, cultural and resources development, also said that Shanghai's economic growth may ease to below 8 percent in 2011.
"Shanghai's housing market won't have any dramatic changes this year," the book said. "With stricter policies to tame speculation many expect a stable performance in housing. Shanghai's property prices will correct but it will be a small one."
Separately, the Shanghai office of the People's Bank of China, the central bank, forecast last week that Shanghai's housing prices will drop slightly in 2011 although transactions will be maintained at the same level in 2010.
Shanghai's housing prices surged in 2010 despite efforts to curb the rise. New homes, excluding those meant for relocated residents under urban redevelopment plans, were sold at an average of 24,176 yuan (US$3,652) per square meter in December, up 21 percent from January.
The issue of affordable homes was put under the spotlight last week during the annual session of the city's top legislative body and political advisory body. Mayor Han Zheng said during the annual session of the Shanghai People's Congress that the city will have no future if it can't handle the housing issue properly.
Shanghai has announced it will levy a property tax on newly-purchased spacious homes. The city has submitted a pilot program for a value-based property tax to the central government for a review. The city will also expand the supply of affordable homes by allocating 5 million square meters of budget homes, or 80,000 apartments, to help low-income groups.
Shanghai eyes an 8 percent economic growth this year but the book said the pace may be lower.
