A total of 18.32 million square meters of residential real estate was released for pre-sale last year, up 26.1 percent from a year earlier, according to figures pro-vided by the Shanghai Property Exchange Center.

The vast majority of that space, or 97.9 percent, was used for housing, with the rest turned into office space, the center reported.

Pudong was the top district for new commercial units, followed by Minhang and Putuo.

Foreigners and Chinese from outside Shanghai played a major role in the real estate boom, the center noted.

Foreigners purchased 2,973 apartments in Shanghai last year, more than three times the figure for 2000.

That sales increase is partially due to new regulations drawn up by the city government that reduce transaction fees overseas buyers must pay. Under the new rules, foreigners pay the same fees as Chinese.

Out-of-town homebuyers bought 24,000 apartments in Shanghai last year, double the number in 2000, ac-cording to statistics from the exchange center.

"The bearish sentiment on the stock market might have shifted investors' capitals to the real estate market," said Kitty Tan, senior manager of the research department of FPDSavills, an international property consultant.

Both the Shanghai and Shenzhen stock markets tumbled more than 20 percent last year amid the exposure of a string of earnings overstatement scandals and uncertainty over the sale of state-owned shares.

The market slump pushed many investors to get out of stocks and put their money into real estate, said Tan.

The market was also helped by the vastly improved quality of apartments available, Tan said.

"These new apartments are far better in quality than the old ones," she said.

According to the Shanghai Real Estate Index, which tracks the local real estate market, prices for residential apartments rose a robust 10 percent last year, mainly buttressed by the availability of high-quality housing in prime locations.

(eastday.com January 25, 2002)