Developers focus of drive to cool real estate market

PUBLISHED : Tuesday, 10 April, 2007, 12:00am
UPDATED : Tuesday, 10 April, 2007, 12:00am

Month-long investigation to look into land hoarding

Guangzhou Construction Committee and 10 other departments yesterday launched a month-long inspection of property developers to prevent them from stockpiling land and holding back completed units to ramp up prices.

The inspection will also focus on developers trying to drive up prices with misleading information. The authorities say they are ready to impose higher transaction taxes on buyers found to have speculated in the property market.

Guangzhou Construction Committee said developers found breaking the law would have their licences revoked.

The move was the latest in a round of measures taken by the city government to rein in the red-hot real estate market, experts said. It followed the central government's instruction earlier this month to cool real estate markets throughout the country.

'Our purpose is the same as the central government's,' said GCC spokesman Xie Zhaobo. 'Regulating the real estate market is a national issue, not only for Guangzhou.'

Mr Xie declined to predict the impact of the inspection on prices, saying the property market was a sensitive topic. 'We have to wait till the end [of the inspection] to see whether the measures can lower property prices or not,' he said.

The average price of property in Guangzhou rose to 7,729 yuan per square metre in February, an increase of 9.6 per cent compared with the same period last year, making it the third most expensive property market on the mainland.

Experts said the measures could hit developers such as Panyu Nansha Development & Construction Co, the property company of the late tycoon Henry Fok Ying-tung, which has a project on a Nansha island.

The company, which has left much of the 22 sq km Nansha land undeveloped for more than 20 years, could not be reached for comment.

Han Shitong , a property expert, said he was watching the government's move but did not think the new measures were practical because similar policies had been announced many times in the past three years without results being seen.

'How can the government define 'hoarding land' and how will they punish the people who are suspected of talking up prices?' he asked.

He gave as an example a prediction by Guangzhou Clifford Group managing director Clifford L.K. Pang early this year that property prices would top 10,000 yuan per square metre in the Pearl River Delta in five years.

'Wasn't that sensational and was he warned by anyone?' Mr Han asked.

A staff member with the Bureau of Land Resources and Housing Management of the Guangzhou municipality said regulating the market was the normal task of the bureau and he did not know what would be done differently this time.

There are few cases of land stockpiling in Guangzhou now as the government has been recovering land left idle in recent years.

'We can't punish them just for holding back their own properties,' the official said.

Guangzhou took back 131 plots of vacant land, totalling 205.65 million square metres, last year.