China's Guangdong Province Mulls Ending Home Pre-Sale System
- Dumping pre-sale system would be blow to region’s developers
- Current system fuels excessive property investment: document
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China’s Guangdong province is considering a proposal to scrap a housing pre-sale system that’s become a major avenue for developers to finance projects.
Guangdong’s housing authority is soliciting developers’ views on phasing out the system, which for decades has allowed home builders to receive funding upfront by selling apartments before construction has been completed, according to a document circulated to property firms and seen by Bloomberg News. Developers have then been able to use those funds to invest in other projects elsewhere, or start new ones.