City governments on the mainland have been stepping up efforts to crack down on price inflation of high-end residential properties as the central government pledges to resolve the housing problem in the country. The Beijing municipal government has launched a three-day inspection of a number of luxury properties, to see if developers are withholding project releases to manipulate prices, according to the Shanghai Securities News. The developments include Beijing Yintai Centre, Flourishing City and Hualong Building. Beijing Yintai Centre is a luxury residential, office, retail and hotel development in the central business district. Average prices of the residential portion ranged from 45,000 yuan to 80,000 yuan per square metre, making it one of the most expensive residential properties in the city. The crackdown came shortly after Tomson Riviera, the most expensive apartment project on the mainland, was reported by mainland media to have been ordered to lower its selling prices or turn all the units in the luxury Pudong development into lease properties. The Beijing Times said with prices of 110,000 yuan to 120,000 yuan per square metre, the price of Tomson Rivera is 16 times the city's average home price. It also said developer Tomson Group used certain words such as 'top class' and 'superior' in its advertising campaign in breach of provisions of the Advertising Law on the mainland. But a Tomson Group spokesperson yesterday said the company had not received any notice from the government to cut prices or convert the development into leasehold properties. She said the project was still being offered on the market. According to an earlier announcement by the group, the company had been fined 505,800 yuan for breaching the Advertising Law in August and it had ceased using those words. Analysts said the moves were in line with the central government's determination to regulate rising property prices. Last month, Premier Wen Jiabao warned that there was a 'strong voice' coming from ordinary Chinese about the continued rise in home prices and pledged to crack down on speculation in the luxury housing sector. Inspection work by the Beijing city government includes an onsite inspection of property sales procedures and construction safety and progress, according to the Shanghai Securities News. As part of the crackdown, Beijing municipal officials said it had taken disciplinary action against 125 development projects, involving total penalties of 6.61 million yuan, since the beginning of the year, according to the website sina.com. Developers of these projects either disclosed incorrect information to manipulate prices or delayed construction progress, it said. Sun Hung Kai Financial strategist Castor Pang Wai-sun believes the central and local governments will continue to regulate the property sector amid rising inflation.
