China’s tightening measures aimed at rooting out housing speculators end up hurting genuine buyers

Many prospective buyers across the country say that the measures intended to keep speculators out are unintentionally causing them heartache

Analysts say speculators will find a way to get past the barriers erected to keep them out

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Property agents in Shanghai say that lived-in home prices rose at least 15 per cent last year, more than double the official estimates. Photo: Reuters

Daniel Renin ShanghaiandPearl Liuin Hong Kong

Published: 10:00am, 13 Feb 2021Updated: 10:00am, 13 Feb 2021

The runaway prices in China’s secondary home market is causing severe distress among property buyers. While authorities across all levels on the mainland have introduced stringent measures to cool the market and weed out speculators, genuine buyers say these policies are hurting them more than anyone else.

“The home prices are driving me mad,” said Franco Feng, 36, a Shanghai resident who is in the market for a three-bedroom flat. “The wild price surge has made it utterly difficult for me to own my home.”

While official data showed second-hand home prices in Shanghai rose 6.3 per cent in 2020, many property agents said that the increase was at least 15 per cent, led by a buying euphoria that started three months ago after nearly three years of stable growth in prices.

Feng, who owns and operates a business consultancy, had a budget of 10 million yuan (US$1.55 million) and initially felt confident that he would easily get a home to his liking.

Residential buildings in the Century Park neighbourhood in Shanghai. Photo: Bloomberg

“To own a flat I targeted last year, I have to pay at least an extra 1 million yuan,” Feng said, who is getting married soon. “That’s a big sum particularly after the coronavirus pandemic dented my company’s sales last year.”