However, in the commercial sector, prices and rents of local office buildings remained unchanged, following a slight increase in August.

Residential prices edged up 0.4 percent last month from August, Shanghai Real Estate Index reported yesterday.

"With growing demand and supply, prices will be stable for a while after a dramatic rise earlier this year," said Wu Zhenguo, a researcher at the index office. Prices of new projects are mostly stable, the report said.

Developers of some new projects, which are selling at higher prices than the average level, may have to cut prices to boost sales, said Wu.

In August, the city government introduced a public bidding system for domestic and overseas developers, and stopped charging those from outside China's mainland higher land-leasing fees.

"With the new policy allowing foreigners and overseas Chinese to buy all kinds of properties here, sales of high-end apartments will surge gradually," Wu said.

The report noted that the local property sector still needs time to recover due to the considerable size of vacant space in the city, despite optimism about its future.

(eastday.com 10/11/2001)