Shenzhen announces ban, penalty on property cheats as homebuyers try new tricks to profit from red-hot market

Name: Cheap housing but few economic opportunities for young Chinese in city along Russian border
Uploaded: 2021-01-24T11:12:35.000Z
Duration: 8 min 7 s
Description: Cheap housing but few economic opportunities for young Chinese in city along Russian border

City’s housing bureau found 12 fraud cases of buyers using other people’s identities to purchase new homes in a recent project to skirt ownership limits

Cheats will now face a three-year ban and be barred from buying or renting units under city’s affordable and talent-based schemes

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Residential buildings and offices are seen in Shenzhen in September 2019. Live-in home prices rose to an all-time high in 2020. Photo: Reuters

Sandy Li

Published: 7:12pm, 24 Jan 2021Updated: 10:59pm, 24 Jan 2021

Shenzhen’s local government will slap a three-year ban on residents who provide false information on new property purchases to stamp out cheats, after authorities discovered 12 fraud cases at a new housing project.

Authorities in China’s wealthiest city in southern Guangdong province announced the penalty on Saturday after witnessing a buying frenzy in several new developments. A limit on home ownership and price caps to douse speculation have failed to restrain prices, creating opportunities for buyers to flip new homes to profit from higher prices in the secondary market.

The warning shot from the Shenzhen Housing Bureau comes two days after Shanghai’s local authorities unveiled some of the most draconian policies in years to curb speculation in residential real estate, including rules to define property rights among estranged couples in the nation’s costliest housing market.

“There are higher cases of people borrowing names of non-owners to make purchases as investors bet on continuing price hike” despite tough measures to cool the red-hot market, said Andy Lee Yiu-chi, chief executive for southern China market at Centaline Property Agency. “Cash rich investors are willing to adopt high risk methods just to make a quick buck.”

08:07

Cheap housing but few economic opportunities for young Chinese in city along Russian border

Shenzhen, a city of 13 million people, is dubbed the Silicon Valley of China and home to some of the nation’s biggest companies including Huawei Technologies, WeChat operator and online gaming giant Tencent Holdings and liquor distiller Wuliangye Yibin.

Average new home prices stood at 54,948 yuan (US$8,478) per square metre last year, the second highest in China after Shanghai’s 55,990 yuan, according to data from China Real Estate Information Corporation. Live-in home prices jumped 24.3 per cent last year to an all-time high.

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