Date
21 August 2018

Property agents busy turning away buyers amid sales frenzy

It is now the traditional peak season in China’s property’s market. During this “golden week”, a seven-day holiday coinciding with National Day, the real estate market has been on fire, reports say.

Demand has been so strong property agents have been busy turning away potential homebuyers. Some of them are said to be offering agents expensive gifts in return for assurances that they will have a chance to buy a house.

It’s not uncommon to see units being snapped up within a day or overnight.

Take Wanjinxian {萬錦熙岸}, a property project in Nanjing, for example. Sales started at 10 p.m. on Friday, with 200 units up for grabs. One potential buyer arrived half an hour late and missed out on the action entirely. All units had been sold within 30 minutes. “They were not buying houses, they were just grabbing them,” he told reporters.

With housing demand surging as never before, property developers have the upper hand.

If you want to buy a house in Beijing, you will need to pay a compulsory fee for house renovation, ranging from 300,000 (US$49,000) to 800,000 yuan, in addition to the down payment, Xinhua.net reports.

That brings the actual price close tor 30,000 yuan per square meter. By comparison, the average price per square meter in 10 major cities including Beijing and Shanghai was around 18,000 yuan last month.

The price gouging is a naked attempt to get around government-mandated home price caps after these were further tightened in the first quarter.

The average house price in 100 major cities rose 1.07 percent in September from the previous month. Nationwide, it has risen for 16 straight months, with the growth rate topping 1 percent for the first time since May, according to the latest data from the China Index Academy.

Chen Guoqiang, vice president of China Real Estate Society, said the “land king” phenomenon, the rapacious hoarding of land by property developers, is causing record-high property prices and lifting house price expectations.

In turn, rising house prices have become a trend. If the government does not tighten its housing policy with further curbs such as a property tax, home prices will keep growing for the rest of the year.

However, any major policy change is not likely until the third plenary session of the Communist Party in November when party leaders decide which path the country should take toward national development.

– Contact the writer at [email protected]

RA

 

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