China’s ‘Silicon Valley’ closes home-buying loophole as sentiment borders on mania
Hangzhou bans corporate buying of property after lottery result on Monday that saw three companies owned by one individual win the right to purchase
Authorities in Hangzhou moved to prohibit corporate buying of housing, closing what some believe was a loophole that gave an unfair advantage to some purchasers under the lottery system, the latest measures to calm the city’s blistering residential market.
In statement published online Tuesday, the Hangzhou Housing Security and Management Bureau said it had suspended all purchases of new and pre-owned residential property by corporate and institutional buyers.
The administrative measure was unveiled a day after local media reported that three companies owned by one individual had won the right to buy flats at Longxi, a project built by The Wharf (Holdings), through a lottery scheme held on Monday.
“It is a fast-fix policy to better regulate the property sector,” said Yan Yuejin, director of E-house China R&D Institute, a market intelligence firm. “It shows the Hangzhou government has made up its mind in cooling off the property market to guarantee that those who really need a house can get one.”
Hangzhou’s new home prices were unchanged in May from the prior month, a result of the government’s stringent property curbs, including direct price controls, as part of cooling measures in place since 2016.
