Beijing yesterday moved to hose down red-hot property prices further by banning developers from receiving deposits from prospective buyers of uncompleted homes before getting official approval.
Under the new rules, once the government has granted the green light to developers, they must publish the price of each unit available for pre-sale within 10 days. The move is aimed at restricting developers from pushing up prices before the official launch of a property.
The announcement is the third policy move of its kind in less than a week as Beijing sets about curbing speculation in the property sector. Developers that hoard properties to create a false impression of a supply shortage and then push up prices would be punished, the Ministry of Housing and Urban-Rural Development said in a notice on its website. The notice also said local regulators must grant pre-sale approval to at least one entire building rather than units or floors.
At present, many developers encourage potential buyers to pay a deposit to reserve buying rights before the official launch of their projects. Developers then set selling prices after taking into account the initial buying response.
'The series of measures announced this week show the central government's determination to cool off speculative activities and skyrocketing home prices,' Chen Jie, deputy director of Fudan University's centre for housing policy studies, said. 'They will not stop regulating the market until they see prices falling, or at least stop rising.'
On April 15, the State Council raised mortgage rates on second homes to 1.1 times the central bank's benchmark lending rate instead of the current 80 per cent. Buyers purchasing their second homes must now pay at least a 50 per cent deposit, up from 40 per cent.