The Shanghai property market has resisted the central government’s move to curb home prices, with the city’s combined property value for 2010 hitting 207 billion yuan ($31.4 billion).
The figures from the China Real Estate Information Corp (CRIC) revealed that average unit prices in Shanghai reached 2.60 million yuan. About 79,744 apartments units changed hands, with new units located within Shanghai’s inner ring priced at 6.52 million yuan on average, up 36.4 percent from 2009.
Apartment units in the inner and middle rings rose 41.4 percent year-on-year to 4.23 million yuan, while units between middle and outer rings jumped 58.6 percent year-on-year to 3.18 million yuan. Units between the outer ring and outskirts cost 2.16 million yuan, or an increase of 53 percent year-on-year, while an apartment in the city-outskirts rose 55 percent to 1.71 million yuan.
According to some property watchers, Shanghai’s stable investment environment and massive infrastructure investments have resulted in resilient home prices.
The city’s property price increases of more than 26 percent, higher than Hong Kong’s will be the cause of consternation for the government especially since Shanghai residents earn less than one-tenth of HK residents’ salaries, leaving many dependent on government-subsidised housing.
However, analysts said that rapid urbanisation in the rural areas may yet negate property investment in the city despite more than 6 million people moving into the city.
Shanghai is expected to implement a property tax for new properties in a move to curb increasing home prices.