City government to set values as developers resist falling market

THE Guangzhou government aims to bring down property prices in the city by recommending 'reasonable prices' for different districts.

A slowdown in the mainland real estate sector has led to price falls in many cities in Guangdong province. But property owners and developers in Guangzhou are reluctant to cut asking prices.

Jin Yiguo, assistant to the chief of the Guangzhou Lands and Real Estate Management Bureau, said: 'The government will announce what will be reasonable prices, so that there will be pressure for prices to fall, and people will know what to expect for various districts.' City officials believe that prices for housing, offices and commercial space are relatively high and do not reflect market conditions. Mr Jin said developers were reluctant to cut prices on their own, for fear that such a move would reflect negatively on them.

Though some realised the need to lower property prices, they dared not do so as it could endanger their interests, he said.

'Calculating the cost of construction and the land leases, the prices need not be set so high. Therefore, we want to look at how to lower them to a reasonable level.' Mr Jin said the authorities had already gathered information on property prices and the next step was to break down the costs to arrive at a selling price.

By setting standards in this way, buyers would have a better idea of what to expect, he added.