Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Shenzhen Guides Developers to Set ‘Reasonable’ Home Prices

Don't Miss Out —
Follow us on:
Shenzhen Guides Developers to Set ‘Reasonable’ Prices Amid Curbs
Apartment buildings stand in the Futian district of Shenzhen in Guangdong Province, China. Home prices in Shenzhen rose 2.6 percent last month from January, the biggest gain among China’s 10 major cities. Photographer: Forbes Conrad/Bloomberg

March 14 (Bloomberg) -- Shenzhen said it’s taking steps to guide developers in setting “reasonable” prices, responding to a report by news portal Sina.com that the southern Chinese city ordered a cap on values.

While the city hasn’t introduced a new policy, it has continued implementing the central government’s measures to ensure prices don’t rise too quickly, the Urban Planning Land and Resources Commission of Shenzhen Municipality said in a statement late yesterday. The authority has strengthened oversight of pre-sale approvals and will set the year’s home-value target as soon as possible, it said.

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 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 as part of the latest curbs.

“All the so-called new policies in fact is just enforcing the original practices on the implementation level,” Alan Jin, a Hong Kong-based property analyst at Mizuho Securities Asia Ltd., said in a phone interview today. “Local governments wouldn’t have the initiatives to take the lead on property curbs, but just to follow the central government’s orders.”

Cities overseeing pre-sale approvals “is a desperate measure to manually restrain price growth,” Jin said.

Rising Prices

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., the country’s largest real estate website owner, which monitors 100 cities.

A gauge tracking property shares on the Shanghai Composite Index was little changed at the close of trading, after declining 2.5 percent to the lowest in three months yesterday. China Vanke Co., the country’s biggest developer, fell 1.4 percent to 10.80 yuan in Shenzhen trading.

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 yesterday, citing unidentified officials at local developers.

The reported “price cap” is not new and has been in place since 2011, wrote Deutsche Bank AG analysts Tony Tsang and Jason Ching in a note yesterday after checking with the city’s housing authority.

The cap in Shenzhen requires the month-on-month growth in the average transacted prices of all new homes to be zero, the analysts said.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.