Wang Yongming, general engineer of an island villa project in Taihu Lake, felt relieved when the Suzhou government denied a rumor last week that individuals would be allowed to lease islands because the clarification has secured the value of his projects, half of which were bought by people from Shanghai.

　　In August, some newspapers in Suzhou carried a story saying that individuals may be allowed to rent islands in Taihu Lake, China's third-largest fresh-water lake. The news raised eyebrows of potential investors in neighboring cities, including Shanghai.

　　"I heard rumors that some people like artists had rented islands for individual use," Wang recalled.

　　"But anyway, it's fortunate the government denied the rumor. Since individuals can't lease islands, our project will continue to be rare and we can secure the value of our villas."

　　Last week, Suzhou Housing and Land Administrative Bureau reiterated that all islands in Taihu Lake are natural resources and could not be leased out for commercial use.

　　The Suzhou government used to allow companies to lease islands in the lake to develop villa projects. But from February, the government banned further leasing following a central government ban on new land leasing for villa projects.

　　"The government's control on island leasing in Taihu Lake actually created much room for our villa prices to rise," Wang said.

　　The price of Taihu Star villas has already surged to 8,000 yuan (US) from 4,000 yuan per square meter during the past year.

　　Shanghai residents bought more than 60 percent of Taihu Star villas to be used as vacation properties, Wang said. He also estimated that Shanghainese also bought half of other villa projects around the lake.

　　This phenomenon is a result of Shanghainese' growing wealth, said Deng Wei, a researcher at the Real Estate Institute, Shanghai University of Finance and Economy.

　　"Global experience has shown that the buying of vacation property takes off when the per capita gross domestic product surpassed US,000," Deng said. "Shanghai has reached that level."

　　The city's per capita GDP approached US,000 in 2002, according to the Shanghai Statistics Bureau.

　　The prices of the villas are also reasonable, Deng said.

　　"When some villas along the highway connecting Shanghai and Suzhou carry price tags of as much as more than 10,000 yuan, the buyers may feel somewhat easy to accept such a villa on an island in Taihu Lake," Deng noted.