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Clampdown on illegal practices in home presale
By Cao Qian |
November 3, 2010, Wednesday
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Print Edition
Print Edition
SHANGHAI is to crack down on illegal activities involving the presale of new homes by real estate developers and brokerage agencies with citywide inspections.
This is the latest effort by local government to protect home buyers and further regulate the housing market.
Residential projects currently under presale processes and housing developments qualified for presale but which have yet to apply for certain government certificates are covered.
The inspection is scheduled to last until the end of this year, according to a notice issued by the Shanghai Municipal Housing Support and Building Administration Bureau.
Illegal practices to be tackled include: taking deposits of any kind from buyers; deliberately postponing launch dates; holding back property sales to boost profits as prices rise and signing fake home purchase deals.
Developers who fail to disclose all apartments that are available as well as their prices, set prices at "abnormally high" levels, or artificially create supply shortages by faking sale contracts will also be exposed and punished, according to the notice.
Real estate developers and brokerage agencies are also banned from selling two or more homes to a single family.
On October 7, Shanghai put a brake on housing speculation by capping the number of homes a family can own.
District and county-level inspections, set to be completed by mid-December, will be conducted on a project-by-project basis.
The names of those who have broken the law will be disclosed in the last two weeks of the year, with punishment to follow.
"The inspection will enable the local industry watchdog to quantify the scale of such illicit practices in the local market," said Shao Minghao, research head of Shanghai Hanyu Property Consulting Co Ltd, one of the city's major real estate chains. "It could also be helpful to their future policy-drafting."
This is not the first time that the government has attempted to tackle presale abuses this year.
In late April, after the central government raised the down payment requirement on second-home mortgages to at least 50 percent, the Ministry of Housing and Urban-Rural Development issued a similar statement.
An analyst said it remains to be seen whether the new clampdown will work. "It depends on whether the watchdog can be really tough on those violators," he said.
This is the latest effort by local government to protect home buyers and further regulate the housing market.
Residential projects currently under presale processes and housing developments qualified for presale but which have yet to apply for certain government certificates are covered.
The inspection is scheduled to last until the end of this year, according to a notice issued by the Shanghai Municipal Housing Support and Building Administration Bureau.
Illegal practices to be tackled include: taking deposits of any kind from buyers; deliberately postponing launch dates; holding back property sales to boost profits as prices rise and signing fake home purchase deals.
Developers who fail to disclose all apartments that are available as well as their prices, set prices at "abnormally high" levels, or artificially create supply shortages by faking sale contracts will also be exposed and punished, according to the notice.
Real estate developers and brokerage agencies are also banned from selling two or more homes to a single family.
On October 7, Shanghai put a brake on housing speculation by capping the number of homes a family can own.
District and county-level inspections, set to be completed by mid-December, will be conducted on a project-by-project basis.
The names of those who have broken the law will be disclosed in the last two weeks of the year, with punishment to follow.
"The inspection will enable the local industry watchdog to quantify the scale of such illicit practices in the local market," said Shao Minghao, research head of Shanghai Hanyu Property Consulting Co Ltd, one of the city's major real estate chains. "It could also be helpful to their future policy-drafting."
This is not the first time that the government has attempted to tackle presale abuses this year.
In late April, after the central government raised the down payment requirement on second-home mortgages to at least 50 percent, the Ministry of Housing and Urban-Rural Development issued a similar statement.
An analyst said it remains to be seen whether the new clampdown will work. "It depends on whether the watchdog can be really tough on those violators," he said.
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