Shanghai blocks sales of commercial property converted for residential use

The Shanghai authorities have called off the approval of any new apartments to be built on land designated for commercial use, their latest measure in response to a broader campaign to curb the red-hot property market in China’s biggest cities.

According to a document released by the Shanghai housing authorities, any planned residential projects converted from offices and shops will not be granted sales approval, while the relevant departments will re-examine cases where the projects have won approval but have yet to be launched for sale, or where the units have been sold but the keys have not been handed over to the buyers.

The authorities estimate 17 million sq metres of existing projects will be affected.

“We believe even those developers that have been given sales permits or pre-sold units already will be forced to change the sites back for commercial or office use,” said Yan Yuejin, research director at Shanghai-based E-house China R&D Institute.

Shanghai is the last of the country’s four first-tier cities to impose tougher measures on commercial housing. Beijing banned the sale of flats converted from commercial or office space to individuals in March.