Shanghai Probes Developers, Realtors Over Suspected Violations

  • Investigates whether eight builders wrongly raised prices
  • Effort to reduce ‘irrational’ land sales, rumor-mongering

China’s financial hub Shanghai is stepping up a crackdown on property developers and the flow of funds into land transactions, part of broader government efforts to prevent a housing bubble.

Shanghai’s commission of housing and urban-rural development said Tuesday it was investigating whether eight developers raised selling prices for residential projects without permission. The agency has already suspended transaction licenses for some properties, according to a statement posted on its official Weibo account. Authorities also said they punished seven property agents for violations including spreading misleading information.

Local governments have moved to calm the Chinese property market after new home prices surged the most in six years. The country’s housing ministry last week ordered local regulators to intensify probes into suspected rumor-mongering and “malicious” advertisements that play up rising home prices. A trade association representing realtors in Shenzhen also banned brokers from using certain advertising terms, “the cheapest” and “exclusive.”

The Shanghai crackdown followed measures announced earlier this month to tame excessive home-price gains, including forbidding price increases in new home pre-sales without approval and increasing land supply. A plot of land sold for a national record price in Shanghai in August.

The municipal government has set up a working group to better monitor funds in land transactions, the housing agency said in Tuesday. Funds from bank loans, trust firms and insurers are banned from being used in land bidding.

— With assistance by Emma Dong

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