SHENZHEN: The stagnancy of the housing market in this southern boomtown represents a ray of hope for some local homebuyers, but investors say prudence must rule the day.

Resident Emily Kang said she was pleasantly surprised to discover developers had begun pricing their new properties more reasonably.

"House prices had been rocketing for the past six months, and I was beginning to think my dreams of owning a home were impossible," the 25-year-old media worker said.

The average property price in Shenzhen hit a record high of 17,350 yuan ($2,350) per square meter in October, up almost 60 percent from the 10,900 yuan recorded in January, according to figures released by the city's land authority.

The per capita disposable income of local residents increased by 5 percent to 22,567 yuan last year. Even with the official forecast of a 7 percent rise in earnings this year, most people will still find it difficult to buy a property, Kang said.

"It has become a heavy burden for an ordinary family to buy an apartment in Shenzhen. But without an apartment, I will not feel at home in this city of migrants," Kang said.

However, the situation has improved somewhat since September, when the number of real estate transactions suddenly dropped in the face of national- and city-level policies aimed at curbing speculation. The comparatively prudent mortgage policies put in place by commercial banks have helped.

There were transactions involving more than 153,000 sq m of real estate in October, down from 800,000 sq m in January, official figures showed.

Wang Feng, director of the Shenzhen Real Estate Research Center, said that although the average price of new apartments continued to rise in October, mainly because of sales of luxury homes, housing prices in general have fluctuated since September.

Specifically, the average price of an apartment measuring less than 90 sq m dropped by 7.6 percent in September from August, but rose slightly in October, he said.

The average price of an apartment measuring between 90 and 144 sq m fell by about 6 percent month-on-month in October.

"The market is filled with the wait-and-see sentiment because the climbing prices and central government's new macro-control policies have greatly depressed the desire of both homebuyers and investors," Wang said.

Wen Jin, who works at a local travel agent and owns two apartments, one of which he rents out, said house prices could drop further in the coming months.

"There's no rush to buy at the moment. In my opinion, a reasonable price would be about 10,000 yuan per sq m, or maybe less. Otherwise the investment will be risky," he said.

(China Daily 12/13/2007 page5)