New-housing prices in Shanghai are likely to grow by 25 percent this year, driven by the increasing disposable income of local residents, investment enthusiasm and expat demand.

　　Such growth indicates that the city?s average new-apartment price would rise to 5,691 yuan (US.67) by the end of the year. The average new-housing price was 4,553 yuan at the end of 2002, according to the National Bureau of Statistics.

　　The benchmark of the local housing market, the Shanghai Housing Index, grew 1.7 percent last month to 1,013 points, the Shanghai Real Estate Index Office reported yesterday. That followed record 4.5 percent growth in July. Based on the prices paid and the sales volume of 167 sample housing projects, the index climbed for the 34th consecutive month.

　　For the first eight months, the index surged 19.3 percent, compared with a 15-percent growth for all of 2002.

　　Shanghai?s rising housing prices are unlikely to cool, the office forecast in its monthly report.

　　òThe 25 percent price hike will largely exceed that of the city?s gross domestic product this year. That partly results from people?s higher income,ósaid He Xiaocheng, an analyst with the office.

　　Urban Shanghai residents had an average family disposable income of 13,250 yuan last year, according to the Shanghai Statistics Bureau. The figure is 11.5 percent higher than in 2001.

　　òWith income growth, people are able to save more after spending on daily necessities like food and clothes. Attracted by the bullish market, more people are putting their money in asset investment,óHe said.

　　The expected growth in housing prices this year is largely a result of a price hike in high-end homes, said Deng Wei, a market observer at Shanghai University of Finance and Economics.

　　òThe continuous rise in new-housing prices attracted many investors from other parts of China as well as from outside the country. They have helped to sustain the demand of high-end homes where prices are more than 7,000 yuan per square meter,óhe said.

　　The arrival of numerous multi-nationals has also brought large numbers of executives who receive housing subsidies with their jobs.

　　Currently, the vacancy rate for new housing has dropped to aòpretty low level,óespecially for the new residential projects in pre-sales, He said.

　　But in the long term, large-scale construction of low-end residential projects for Shanghai?s relocated families, who gave way to the city?s key urban construction projects, will probably pull back the average apartment price.

　　òIn the coming three years, budget homes of a total 9 million square meters will hit the market, He said.

　　òTheir influence should be taken into consideration,óthe analyst said.