Residential property in this economic hub could soon be in short supply if the growth of investment by developers continues to slow, the China Academy of Social Sciences (CASS) said in a report published on Sunday.

The 2008 China Property Market report showed that of the 70 cities surveyed, Shanghai last year recorded the lowest rate of property investment growth.

Developers invested 130.7 billion yuan ($18.65 billion) in the Shanghai property market last year, up 2.5 percent on 2006. However, the national growth figure was 31.8 percent.

The CASS said if the growth rate remains low, there will be a shortage of houses, which will in turn lead to further price increases.

Over the past 12 months, property developers have been hit by a series of negative factors, including government measures to regulate land sales, reduce credit and provide more affordable homes.

At the same time, the wait-and-see attitude of consumers has made many house builders reluctant to launch new projects.

But not all buyers are prepared to wait.

Liu Sisi, a 25-year-old journalist, said she was determined to buy an apartment prior to her wedding.

"My parents and friends tried to talk me out of it, saying I should wait for the price to fall," she said.

"But I want to buy now."

Liu said she and her fiance are prepared to pay up to 20,000 yuan per square meter for their dream home.

"I don't really care what the price will be in a month or a year," she said.

"That's the price I can afford now and that's the price I'm willing to pay."

Equally determined is Veronica Zhao, a 29-year-old who works for a public relations firm. She and her sister are planning to buy an apartment in the Gubei area of Shanghai later this year.

"It will be an investment for us," she said.

Her sister already owns a small property in Shanghai.

"Compared to stocks, property seems like a much better bet," Zhao said.

Shao Minghao, a researcher with Hanyu Property Agency, said he expects Shanghai property prices to continue to grow steadily in the near future.

"But the rate of growth will be slower than before," he said.

"The government doesn't want property prices to grow at a faster rate than average salaries."

(China Daily April 29, 2008)