Posted by: Fiona Zhou on 2009.05.25 14:46 in Fiona

At a recent forum, the Shanghai Administration of Statistics and Shanghai Real Estate Association emphasized that real estate developers should not raise prices during the month of May, which usually sees a seasonal uptick in sales. The event followed an April 9 forum that spoke of stabilizing real estate prices, which have been climbing since March, and the decision of Shanghai's bank regulator to have commercial banks cap home loans at 60% of the sale price, down from 70%, starting May 1.

Nonetheless, Shanghai developers are raising prices. From May 11 to 17, transaction prices for new residential developments were up 3% week-on-week to the highest level since the beginning of this year, RMB 14,106 per square meter, with some prices soaring as much as 30%.

Vanke (000002.SZ, 200002.SZ), China's largest residential real estate developer, delayed opening two new projects in Shanghai until June because sales have already exceeded the company's expectations -- Vanke's Shanghai subsidiary achieved its May sales target on May 20. When they are put on the market in June, the price of the new projects is expected to rise 10-15%.

After seeing these trends, it seems only natural to expect real estate prices to continue to climb in June.