Soaring housing prices in Shanghai have made it the most costly property market in China. But at Thursday's press conference, a government spokesperson refuted the comment that foreign investment is pushing prices up, saying it is a normal fluctuation. 
 
5,118 yuan, or US$616, a square meter! That's the average property price in Shanghai, double the national average. This figure means the city has supplanted Beijing as China's most expensive housing market.

Remarking on this, government spokesperson Jiao Yang says it reflects the reality of the market, and is not the result of speculation.

She says after more than ten years of development, real estate has become a pillar industry, and with Shanghai's reinvigorated power as an economic powerhouse, it is now highly valued by investors. The property market is on a healthy track, and some ups and downs are quite normal.

But having said that, she notes that prices have increased faster since last year, leading to fears of a real estate bubble.

Adding that the forces behind rising prices are diverse, such as huge demand and high operating costs, Jiao Yang indicates that the government is introducing policies to slow it down. This includes building more affordable housing to accommodate middle and low income families, and, to combat speculation and tighten its grip on property financing, saying no to mortgage loans to second residence buyers.

As some blame high prices on swelling foreign investment in housing projects and purchasing groups from neighboring provinces, the government spokesperson dismisses the rumor that Shanghai may close to foreign property investors, saying that as a modern metropolis, Shanghai is open to the rest of the world, and transparent governance will facilitate their settling in the city.

(CRI March 26, 2004)