"While the price run up in Shanghai has been less severe than other cities, all buyers remain cautious. In the second-hand market, sellers now entice buyers with all-inclusive packages, by sweetening the deal with all relevant taxes pre-paid by the seller," said Kenny Ho, head of research China at Jones Lang Lasalle.

"But the individual property owners are not expected to largely slash prices because most of them have no liquidity pressure, unlike many real estate developers, "Ho added.

The opening price of some luxury apartments in the central city has seen a decline. Regency Park, developed by Hong Kong-based Hutchison Whampoa Real Estate, was sold at an average price of 33,806 yuan per sq m in the first two weeks after it opened 162 apartments on June 6, down 24.4 percent from the average price between Jan 1 and June 5. Though the company attributed the price decline to the poor location of the apartments, the 10,000 yuan per sq m price drop gave potential buyers a ray of hope for a housing price correction.

"The less buoyant buying sentiment was also true of the high end and luxury segments, causing the typically slow winter buying season to drag on through the spring," said Ho.

Prince Hills, with the average price of 60,000 yuan per square meter, offered 44 new units for sale on April 28 , but only 7 of them were sold as of June 18. Of the 147 units launched in April, Bund Side in the downtown had only sold 17 by mid June.

However, the price of most luxury apartments remained strong despite the weak market sentiment. The high-end residential apartments posted a 1.6 percent rise in price, and the price of luxury apartments jumped 1.7 percent.

"The prices of luxury villas are expected to rise 6 to 8 percent on average in the next half of 2008 because of the scarcity and strong market demand, "said Chen.

(China Daily July 23, 2008)