Shenzhen tries to aid property developers, but loosened curbs drive up prices of homes instead
- Deposit required from developers bidding for plot in Guangming district cut by 40 per cent
- Authorities also raise price cap for homes built in residential area of plot
Crystal Tan and her newly married husband have spent what would have been their honeymoon house-hunting in Shenzhen.
“Buying a home is a priority – we need to get it done this month. Otherwise, we won’t be able to afford anything in this city with the money we have,” Tan, a trader with an international oil company, said. “We were not in a rush because we thought prices were under control, but now it seems that the government controls have been loosened.”
Home seekers such as Tan are rushing to buy property because they expect prices to rise after local authorities in Shenzhen, mainland China’s technology hub, took small steps recently to help its property developers.
For instance, the deposit required from developers bidding for a residential and commercial plot in the city’s Guangming district was cut by 40 per cent to 960 million yuan (US$123.8 million). The plot had been put on the market in October 2019 as well, but was later withdrawn from auction. The authorities also raised the price cap for homes built in the residential area by 10 per cent to 29,800 yuan per square metre.
“When the government sets a higher price for homes, how can we expect the city’s home prices to remain flat?” Tan said.
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The Shenzhen government recently lowered the entry fee for participation in land auctions, and hastened the mortgage approval time frame for buyers.
