Government, developers in Suzhou, ‘Venice of China’, agree to limit property price rises at 5 per cent after uptick in sales, sentiment
● Prices in city’s Suzhou Industrial Park hit 35,574 yuan per square metre, in line with level in neighbouring Shanghai
Suzhou, a manufacturing hub near Shanghai dubbed the “Venice of China”, is considering new property restrictions to cool runaway home prices. A second-tier city with a population of 10.7 million, its property market has reported an uptick in property sales and sentiment since February.
According to a report in the Paper, a publication of the Shanghai government-owned United Media Group, on Monday, the Suzhou government and developers decided to restrict increases in annual new home prices to within 5 per cent in a meeting on Friday. Fresh curbs will be implemented in July if key gauges fail to cool, according to the report.
The 5 per cent cap means the Suzhou government wants prices to drop for the remainder of the year, as increases so far already exceed this target. The average new home price rose 8.45 per cent in May over last year to 22,160 yuan (US$3,259) per square metre, according to consultancy CRIC.
Secondary home prices gained 5.9 per cent in the first four months this year, according to consultancy Zhuge.com.
Homebuyers have been influenced by a strengthened outlook for the market and lower mortgage rates.
“Many buyers flocked to the market to buy a second home after news that land parcels were being auctioned at large premiums. They bought their first home three to four years ago, and have seen their values spiralling up, and wanted to repeat the success,” said Ge Wenwen, a Suzhou-based analyst with CRIC.