"The value of those residential areas in or around the Expo venue will see a growth by at least 20 per cent," according to Tao Qi of 21st Century Shanghai Fuyuan. "Speculators will crowd into the place."

That kind of bullishness has brought increased warnings from government officials that spiralling prices could conceal a bubble in the market that would eventually burst. But investors and speculators have shrugged off the warnings all year as the market continues to rise.

The Expo will create exhibition halls on both sides of the Huangpu River and areas that now contain shipyards and warehouses will be transformed into a riverside promenade with restaurants, shops and theatres.

Xi Junyu, an agent from the Shanghai Haoyuan Property Consulting Company, forecast that while the Expo will not be held for another eight years, some of the work on transport facilities and green areas will be carried out immediately around the site of the venue.

"In the short-term, it will boost the sales of second hand houses in or around that area," said Xi. "In the longer term, property developers from both home and abroad will certainly move into the area to earn profits."

Analysts said the Expo would boost prices in commercial as well as residential space.

The announcement comes as analysts are already wary of an overheated market, which most agree is fuelled by a strong degree of speculation.

"The participation of these speculators does impose some impact on the market, raising the cost by a certain amount," according to Xi Junyu of Shanghai Haoyuan Property Consulting Co.

Analysts see strong buying by people outside Shanghai, especially at the top end of the market. Analysts say that as much as 25 per cent of the high-end properties over 8,000 yuan (US$960) per square metre are being bought by Chinese from other mainland provinces as well as Hong Kong and Taiwan. Some 5 per cent of the top end market is being bought by non-Chinese.

Analysts point to some high end buildings that are being offered on property exhibitions in Hong Kong, where up to 60 per cent of the flats are bought by investors in the SAR.

China Daily news

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