According to Yu Zhengshen, the city's Communist Party Chief, Shanghai is planning to set up more procedures for directing real estate prices in the financial hub of China. The municipality is in the process of offering more modest-rate homes and more supply of land.

Yu Zhengshen also mentioned that a policy to lease the public housing will also be commenced by the end of the March. "Shanghai is also currently studying measures to adjust demand", said Yu Zhengshen.

At the opening of the National People's Congress on the 5th of March Wen Jiabao, Chinese Premier promised that he would crack down on rumors in the real estate market after the property prices in the month of January climbed rapidly in 21 months. According to James Chanos, who is the founder of hedge fund Kynikos Associates Ltd., the property market of China is "bubble on the edge to burst".

This year, the shares of China Vanke Co., which is the leading overtly listed property developer of the country, have been chopped down by 13.4 % while the shares of Poly Real Estate Group Co., which is the second major openly, listed developer, fell by 14.6%, as compared to the fall of the benchmark Shanghai Composite Index.