By Zhan Lisheng (China Daily)
Updated: 2007-07-25 18:04

SHENZHEN: Disappointed with his own wait-and-see attitude over the past couple of years, Xie Xiaojian, an account manager with a local public relations firm, finally decided in May to buy a pre-owned apartment in downtown Shenzhen.

But he found repeated attempts by the apartment's owner to raise the price so unbearable that he decided in mid-June to forego the deal altogether.

He said that he tried to bargain for a price of about 9,000 yuan a square meter for a 120-square-meter pre-owned apartment, but the apartment owner soon asked for another 20,000 yuan before they signed the purchase agreement.

The owner then asked for an additional 60,000 yuan on two occasions.

"I couldn't bear the frequent price rises and the apartment owner even agreed to pay me 10,000 yuan for breaking the contract," he said. "Real estate prices have been surging so crazily, I really regret that I did not buy a house two years ago."

Prices of both new and pre-owned properties have been rising sharply in Shenzhen since early 2006, with some downtown properties in the city now almost as costly as Hong Kong's suburban Yuen Long district, latest official statistics indicate.

The average real estate price in Shenzhen was 15,487 yuan a square meter in June, 14.6 percent higher than in May and soaring over 70 percent from the average price of 9,384 yuan a square meter in 2006.

Pre-owned property prices reached 11,354 yuan a square meter, rising 22.7 percent from March.

Prices of almost all downtown properties have now surpassed 20,000 yuan a square meter and some properties in the urban district of Luohu sell at over 50,000 yuan a square meter.

Andy Lee, general manager of Centaline (Shenzhen) Property Consultants Ltd, said the short supply of houses partly accounts for the prices.

Land supply for property development is far from sufficient compared to intensifying market demand, he said, adding that malpractices by some developers and housing agents have also boosted the price.

Lee said that the rapid price rise in turn has been attracting more property speculators, including from Hong Kong and other regions, further intensifying market demand.

He noted that at least 20 percent of the current property buyers in Shenzhen purchased houses for speculative purposes.