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Crackdown on illicit home sales link
By Cherry Cao |
September 21, 2010, Tuesday
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Print Edition
Print Edition
SHANGHAI has launched a one-month campaign to stamp out illegal collaboration between real estate developers and property agents involved in new home sales in the city.
The Shanghai Administration for Industry & Commerce will pay particularly close attention on collaboration by developers and estate agencies which aims to manipulate home prices, according to a statement posted on its website on Sunday.
The local watchdog started the campaign, which is due to end on October 15, after a media report in late August revealed illicit collaboration between the developer of a residential project in Zhabei District and a few estate agencies.
The report highlighted that instead of selling the apartments to genuine buyers the developer authorized some nearby estate agencies to act as brokers for the units. As a result of the illegal tie-up, many buyers who failed to buy from the developer turned to the agents to buy the units and prices were raised sharply.
"Such practices are not yet prevalent in the city and most of the collaborations are made between small-sized developers and agencies," said Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain. "By adopting such practices, developers can often avoid rasing prices directly which might draw public attention as well as complaints from buyers while at the same time reaping better sales."
New home sales have been rising in the city since August amid a recovery in buying sentiment, and tightening measures by the central government since mid April have not had the desired impact on prices, industry data showed.
The Shanghai Administration for Industry & Commerce will pay particularly close attention on collaboration by developers and estate agencies which aims to manipulate home prices, according to a statement posted on its website on Sunday.
The local watchdog started the campaign, which is due to end on October 15, after a media report in late August revealed illicit collaboration between the developer of a residential project in Zhabei District and a few estate agencies.
The report highlighted that instead of selling the apartments to genuine buyers the developer authorized some nearby estate agencies to act as brokers for the units. As a result of the illegal tie-up, many buyers who failed to buy from the developer turned to the agents to buy the units and prices were raised sharply.
"Such practices are not yet prevalent in the city and most of the collaborations are made between small-sized developers and agencies," said Song Huiyong, research director at Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain. "By adopting such practices, developers can often avoid rasing prices directly which might draw public attention as well as complaints from buyers while at the same time reaping better sales."
New home sales have been rising in the city since August amid a recovery in buying sentiment, and tightening measures by the central government since mid April have not had the desired impact on prices, industry data showed.
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