Beijing developers fear 80,000 yuan per sq m is the unofficial red line not to be crossed
Two and a half years after buying prime plot of land, developers finally granted presale permit at 79,458.99 yuan per square metre
Residential property developers in Beijing now believe that an unofficial price ceiling seems to have been set by city officials on new projects – at 80,000 yuan (US$11,774) per square metre.
The capital’s latest project, China Seal, just outside the southern second ring road, will be released for sale on Thursday after being granted a presale permit, at 79,458.99 yuan per square metre.
But according to industry sources, of all the new projects granted sale permits this year, not a single one has been granted a licence to sell above 80,000 yuan per square metre.
Several industry insiders interviewed by the South China Morning Post said the government did not have any formal documents specifying the ceiling, but developers were now beginning to accept, grudgingly, that 80,000 yuan per square metre was considered a red line that could not be officially crossed.
According to Chinese media, the developers of China Seal consulted with the Beijing housing authorities back in October, proposing an average presale price of 90,000 yuan per square metre, but that was turned down.
The plot was acquired by China Merchants Shekou Industrial Zone Holdings, China Resources Land, Wharf (Holdings) and Ping An Real Estate in January 2015 at nearly 50,000 yuan per square metre and should have been opened for sale last year. Existing homes nearby are currently selling at 66,000 yuan per square metre.
