Shanghai's second-hand housing index continued to rise in January at a milder pace for the second consecutive month with a significant drop in transaction volumes, the local index compiler said yesterday.

The index, released monthly by www.ehomeday.com tracks prices for used apartments across the city, advanced 1.3 percent to 2,246 last month, down by 0.2 percentage points from a month earlier.

"Tighter credit controls by commercial banks, especially on second and multi-mortgage appliers, as well as a growing wait-and-see sentiment among local home buyers, has led to an around 10 percent drop in deal numbers all across the city over the past month," said ehomeday analyst Chi Shengyu.

"In addition, the months right before and after the Spring Festival are the traditional slack season for home purchases and the snowfall in January, probably the heaviest in Shanghai in five decades, also prohibited potential buyers from visiting either sellers or real estate brokerage firms."

Citywide, used apartments in prime areas had mixed performances in January with Huangpu District leading all gainers. Benefiting from an accelerated pace of Expo-related projects, second-hand home prices in Huangpu rose 4.28 percent from a month earlier.

However, prices of used apartments in other downtown districts such as Jing'an and Luwan only gained slightly by 1.85 percent and 1.48 percent each last month, a considerable slowdown from previous months, the compiler said.

Meanwhile, Pudong New Area maintained its robust growth last month with the Lujiazui sub-area securing an impressive 6.02 percent growth, the highest across the city. Other sub-areas such as Sanlin, Shangnan, Luoshan and Jinqiao increased 5.03 percent, 4.04 percent, 4.04 percent and 3.06 percent respectively, according to the report.

Meanwhile, the local rental index, which is also released by the website, climbed 1.2 percent to 1,137 last month with growth recorded in all three categories.

The average rental for high-end apartments, which usually ask for more than 6,000 yuan (US$837) per month for a regular two-bedroom apartment, edged up 0.6 percent with top gainers including Lujiazui, Xintiandi and Xinhua Road.

Middle-class properties, which are leased for between 2,000 yuan and 6,000 yuan per month for a regular two-bedroom apartment, rose 1.0 percent from a month earlier, with those in Jing'an, Putuo and Yangpu districts increasing the most.

And the average rental for the city's privatized public apartments gained 1.6 percent last month, reflecting a rather robust market demand for low-end properties.

Separately, new homes in Shanghai, excluding those designated for relocation uses, were sold at an average 9,767 yuan per square meter during the week to February 21, down 34.89 percent from a week earlier, according to statistics released by Shanghai Youwin Real Estate Information Services Co.

(Shanghai Daily, February 26, 2008)