"But for others, especially those who have a rather tight budget, it is also very likely that they might have to drop their plans."

    Some industry experts emphasized that though the recent increase in interest rates were small, it could have had great impact on people's buying sentiment if the central bank continues to take such action in the near future. That's because for most home buyers, interest rates account for a significant part of the total cost of an apartment.

    As for its possible influence over house prices, industry people said that very limited impact could be expected.

    "Generally speaking, housing prices won't be affected much by this interest rate increase as we all know that the price is basically decided by the market demand," said an industry analyst with a local real estate agency, who declined to be identified.

    Meanwhile, Pan Shiyi, president of SOHO China Ltd, one of the country's major developers, also expressed a similar opinion.

    "Such an increase in interest rates will only have very small influence over housing prices," Pan was quoted as saying by Sina.com. "Not many potential apartment buyers will be deterred by such a small increase."

    However, responses from local residents seemed rather mixed.

    "My boyfriend and I have been looking for a new apartment over the past several months and probably won't change our mind even if the loan rates have been raised," said Vivian Yang, a 28-year-old marketing manager. "We plan to get married next year and just like many other young couples, we want to have a new apartment of our own to start our new life."

    But Tony Yu, who graduated two years ago from a local university, said he thought current housing prices in Shanghai are still quite high.

    "I hope the recent loan rate increase will have a positive effect on the overheated real estate market. If so, more people will be able to realize their dreams of having an apartment of their own."

    (Source: Shanghai Daily)