China property developers cut new home prices in compliance with government curbs designed to cool market

Chinese property developers are cutting prices for newly launched flats in leading cities following government intervention to eliminate speculation in the market.

More than 20 Chinese cities have rolled out a raft of tightening measures in a bid to curb the overheated housing market since the fourth quarter. However, some local governments have gone a step further to directly control prices after president Xi Jinping said “houses are built to be inhabited, not for speculation”, at a meeting in December, 2016.

Shenzhen-based Logan Property expects its new housing project Jiuzuan in Longhua District, which is scheduled to be launched in the first quarter to be priced at 60,000 yuan per square metre, despite its prime location connecting two metro lines and just two minutes subway to the Shenzhen North Railway Station.

“We wanted to sell higher but have no choice, the price limit for Longhua District is now set at about 60,000 yuan per square metre,” said Lai Zhuobin, chief financial officer at Logan Property.

In comparison, a similar Logan project nearby, which launched sales at the end of 2015 and sold at 60,000 yuan per square metre at the time, has since risen to 100,000 yuan currently.