The benchmark of Shanghai's apartment business, the Shanghai Housing Index, grew by 6 percent in the first three months to hit a record-high of 895 points, compared with a 15-percent gain in the whole of 2002. By the end of March, the average price for a local apartment was 4,205 yuan (US$506.63) per square meter.

"The significant increase in local housing index shows the supply of new apartments cannot meet the demand," said He Xiaochen, an analyst with the office.

"Most of the existing apartments have been sold and the vacancy rate is approaching zero," he added.

The index climbed for the 29th consecutive month, and is now 35 percent higher than in November 2000, when it was 663 points.

In the first three months, housing sales increased 6.1 percent year-on-year to 2.36 million square meters, while investment in the sector jumped 29.6 percent to 14 billion yuan.

The rise in housing prices might be good news for investors, but not for potential buyers, especially citizens with financial problems.

(eastday.com April 17, 2003)