Property prices in Shenzhen averaged 6,547.89 yuan (US$790.81) per square meter in the first half of this year, an increase of 12.05 percent compared with the year-earlier period, the Daily Sunshine newspaper reported Tuesday.

The newspaper, however, quoted official figures as saying that apartment sales in June tumbled 13.2 percent month on month as official efforts to cool the country's red-hot real estate industry take effect.

But analysts said it was still too early to say whether June's figures signaled a slowdown in Shenzhen's real estate growth in the second half of this year.

Developers poured 19.65 billion yuan into commercial housing projects in the first six months, a drop of 14.8 percent from a year earlier, and the gross floor space of finished apartments tumbled 23.93 percent year on year to 2.15 million square meters, the newspaper said.

Wang Feng, a researcher with the Shenzhen real estate research center, said the drop in real estate investment had very little influence on housing sales as developers sold 4.89 million square meters of commercial apartments in the first six months, an increase of 12.26 percent from a year ago.

However, strong sales and the drop in investment have helped reduce the number of the city's vacant properties, with the vacant floor space down 38.57 percent from a year earlier to 1.43 million square meters by the end of June.

Wang said demand for commercial apartments grew 10 percent over the past two years and the same growth rate was expected this year.

Secondhand apartment transactions during the period rose 30.62 percent to 4.22 million square meters, with prices up 37.06 percent year on year.

Worried that a recent rise in urban property prices could help fuel an economic bust, the Central Government has taken a series of steps in recent months to cool the sector, including raising mortgage rates and minimum down payments.

Housing price growth in 35 of China's large and medium-sized cities rose 8 percent in April-June from the year-earlier period, compared with a 9.8 percent increase in the first quarter and a 10.8 percent rise in the fourth quarter last year, the powerful National Development and Reform Commission said last week.

The slowdown in real estate price growth indicates the Central Government’s measures to put the brakes on the property sector are working, analysts have said.

(Shenzhen Daily July 20, 2005)