"Investments in luxury residential properties also shot up as many investors cashed out of the Shanghai stock market and turned to luxury properties as long-term investments," said Lina Wong, managing director of Colliers, an international real estate service provider.

In line with the increased transaction volume, selling price for luxury properties grew 2.7 percent in the first half, compared with 3.5 percent in the past 12 months. The rents also grew 2.9 percent, while it rose 3.8 percent from last June.

Worldunion said it's like the two markets are on a seesaw, when "one goes up, the other comes down."

The National Bureau of Statistics has announced that China's real estate investment rose 28.5 percent from a year earlier to 988.7 billion yuan in the first half of 2007.

"Anticipation of further renminbi appreciation should secure a continuous inflow of foreign capital and help fuel the property market," said Wong of Colliers.

(China Daily 07/31/2007 page15)