Shenzhen slaps sales ban on two more property developers
City government's move to bar builders from selling projects and suspend the transactions of four flats raises anti-graft crackdown fears
The Shenzhen city government has blocked sales of two more developers, sparking fear more property firms will come under scrutiny, following the woes of troubled Kaisa Group Holdings.
Project sales by Rongchao Real Estate, a major commercial property developer in the city, and Dong Dao Real Estate were banned yesterday, while the transactions of four flats at Hua Xiang Garden, built by Fantasia Holdings Group, were stopped.
"Shenzhen has become the most-targeted region by the anti-graft campaign and Kaisa's recent default was triggered partly by the blockage of pre-sales," said Edison Bian, the head of China property research at UOB Kay Hian.
Bian said Shenzhen developers and large developers with heavy exposure in the region could be affected, especially those specialising in redevelopment projects, industrial site developments and commercial property developments in the city centre.
"We think state-owned developers are much safer and it is advisable to avoid small and mid-sized non-SOE developers with heavy land bank exposure in the city," he said.
Analysts said more than 1,400 units had been suspended from pre-sale since last month, including 100 office units at Rongchao Commercial Building in Futian, a prime location, and 239 flats at Dong Dao Park in Longgang.
The website of Shenzhen's Urban Planning, Land and Resources Commission showed four of Kaisa's five projects on sale had been blocked, involving more than 1,000 unsold units.