Shanghai will take steps to cool the city's real-estate market as housing prices in China's financial capital are "too high," Mayor Han Zheng said.
The city government will increase the supply of land for property development and speed up construction of affordable housing for low-income families in the second half of this year, Han, 55, said yesterday in an interview in Shanghai.
Record bank lending in China drove average prices for new homes 6.3 percent higher in June in 36 large- and medium-sized cities, according to government data. That gain came even as urban unemployment rose and wage growth for workers in Chinese cities slowed.
"The government should do something to effectively control the speed of growth of the real estate market," Han said. "The housing price in Shanghai is already too high. We must prevent excessive inflation of home prices in this market."
Home prices in China will rise 20 percent by the end of 2010, UBS AG analyst Eric Wong said on July 30. Shanghai's property market will probably be the strongest in the country and residential prices may climb as much as 20 percent over the next year compared with the final quarter of 2008, according to Stanley & Partners Investment Management Co, citing recent land-option contracts and commodities.
