Shenzhen housing authorities said they haven’t introduced a new round of policies to curb home prices, attributing the recent abnormal fluctuations in the housing market to the success of existing cooling measures.
While the city hasn’t introduced a new price cap, it has continued implementing the central government’s policies to ensure prices don’t rise too quickly, after a number of high- priced properties started sales or made plans to start sales this year, the Urban Planning Land and Resources Commission of Shenzhen Municipality said in a statement. The authority has strengthened oversight of pre-sale approvals, and is taking steps to guide developers in setting reasonable prices.
Developers in the southern China business hub bordering Hong Kong have been ordered to have “zero price increase” for new homes, news portal Sina.com reported today, citing unidentified officials at local developers. Wang Youpeng, head of the housing authority, said he’s “not aware” of the rule to ban developers from raising new home prices, Caixin Online reported today.
Local governments must respond to new policies issued by the central government on March 1, including home-price control targets, by the end of the month. Policy makers had ordered the central bank to raise down-payment requirements and interest rates for second mortgages in cities with excessive price gains, enforced the payment of a 20 percent tax on property sales, and told cities to tighten home-purchase limits.
Home prices in Shenzhen rose 2.6 percent last month from January, the biggest gain among China’s 10 major cities, according to SouFun Holdings Ltd. (SFUN), the country’s largest real estate website owner, which monitors 100 cities.
“We’ve heard among industry peers that the new policy may cap monthly sales price gains of individual projects, but it’s not formally announced yet,” said Lin Jianhui, general manager of SouFun’s Shenzhen division. “We’ve seen price-target caps at the district level, but never at the project level.”
A gauge tracking property shares on the Shanghai Composite Index fell 2.5 percent to the lowest in three months at the local close. It was the biggest decline among the five industry groups on the benchmark. China Vanke Co. (000002), the country’s biggest developer, dropped 2.4 percent to 10.95 yuan in Shenzhen trading, while Gemdale Corp. (600383) lost 4.6 percent to 6.05 yuan, the lowest level since Dec. 21.
The price cap in Shenzhen requires the month-on-month growth in the average transacted prices of all new homes to be zero, Deutsche Bank AG analysts Tony Tsang and Jason Ching said in a note today.
The reported “price cap” is not new and has been in place since 2011, the analysts said, after checking with the city’s housing authority.
To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at email@example.com
To contact the editor responsible for this story: Andreea Papuc at firstname.lastname@example.org