Liu Minxia

A SUDDEN boom in prices of pre-owned housing estates in some areas of Shenzhen in February saw values back to the level of the peak in 2007. Sales of pre-owned apartments have constantly broken records in the past few months.

In some large and established residential areas such as Caitian, Yitian and Taoyuanju, housing prices have surged to new records, according to real estate agencies in those areas.

“Since April, prices of apartments in the Yitian housing estate and the surrounding area have surpassed the highest level reached in 2007,” said Tong Xiaoqiong, a manager with China United Property’s Yitian branch. “Apartments which sold at 16,000 yuan (US$2,342.54) per square meter in 2007 can be sold at 18,000 yuan per square meter now. Even families with a combined monthly income of around 20,000 yuan can’t afford these apartments,” Tong said.

In the Caitian area, which is close to Lotus Hill, prices for apartments with more than three bedrooms are around 18,000 yuan per square meter, almost the same as those in 2007. But prices for smaller apartments are even higher than they were in 2007, according to Yang Shuhui, a manager with Shihua Real Estate’s Caitian branch. He thinks housing prices for this area will continue to rise in the months ahead.

Shenzhen’s pre-owned housing prices have been surging quickly since the property market started to rebound in February. The average price of pre-owned housing in the city surged to 10,204 yuan per square meter in May from 9,142 yuan per square meter in December.

Meanwhile, sales of pre-owned housing have also been rising. In April, Shenzhen sold 13,477, or 1.1 million square meters of pre-owned apartments, compared with 893,700 square meters a month earlier. In June, around 15,000 pre-owned apartments sold, breaking the April record.

“Pre-owned housing prices have surged about 20 to 30 percent in the past few months,” said Xiao Xiaoping, a senior analyst with Shihua Real Estate. “Daunted by surging prices, some homebuyers have postponed plans to buy properties.”

Some analysts worried that more bubbles were emerging in the housing market. “The demand will shrink further if the housing prices continue to rise,” said Song Ding, a senior real estate analyst with China Development Institute.

Analysts suggest homebuyers should think clearly when considering buying a property. Mortgage payments should not be more than 40 percent of a family’s monthly income.