BEIJING, Dec. 13 - Shanghai's benchmark index for second-hand housing prices declined by 0.9 percent from October to 1,661 points last month, recording the biggest drop in a downward trend that has spanned the past six months, the Shanghai Existing Property Index Off ice reported yesterday.

    The index, which tracks the price and transaction volume of Shanghai's preowned housing market, lost 16 points in November, a month shadowed by rumors of possible higher taxes on second-house transactions.

    Media reports in late October quoted an unnamed official at the Shanghai Land Resources Bureau as saying the city government was considering a 20 percent personal income tax on property sales. These reports caused a panic among speculators who rushed to put houses onto the market for sale.

    "But buyers are still sitting on the fence as the (fall in) prices has not been to their expectation," said Wang Hao, an analyst at Century 21 Real Estate Service Co.

    Form June, Shanghai began to impose a higher tax to rein in speculation in the real estate market resulting in a continuous decline in price and transaction.

    Among the city's 11 districts that were surveyed, Putuo led the price slide with a 2.25 percent drop last month, followed by Changning's 1.74 percent and Hongkou's 1.6 percent. Other districts saw a drop below 1.5 percent.

    The average price in the Putuo district's Yichuan area declined by 3.3 percent to 8,245 yuan (US$1,025) per square meter last month, the biggest decline among all the areas tracked.

    It is worth noting that half of the 16 areas in the 11 districts that were surveyed which posted the biggest decline last month were near the outer ring road, the report said.

    The percentage of Shanghai residents who want to buy homes within the next three months remained low in the fourth quarter, according to a survey done by the People's Bank of China. The central bank didn't provide the exact percentage in Shanghai in the survey report released yesterday.

    It said in seven major cities including Shanghai, only 19.2 percent of the respondents plan to purchase homes in the coming three months. The percentage was 19.6 percent in the third quarter.

    (Source: Shanghai Daily)