Cheap homes spark corruption fears

By Jane Chen | March 22, 2010, Monday |

Online Edition

MORE than 70 apartments have been sold at half price in an east China city, sparking public accusations of corruption and trade manipulation.

The 74 apartments were sold between March 8 and 14 in Hangzhou, capital city of Zhejiang Province, Xinhua news agency reported today.

Among them were 11 apartments in Gongshu District which were sold at 13,497 yuan (US$1, 977) per square meter on March 14, compared with the market price of 22,000 yuan.

On the same day, another nine apartments in Qiantang Air Mansion were sold at 15,175 yuan per square meter, nearly half the 30,000 yuan price of similar property in the neighborhood, Xinhua reported.

Sales staff claimed these transaction prices were special offers for those with a close relationship with the developers such as shareholders, and called it a "public secret" in the housing industry.

But an industry insider told Xinhua that corruption could be involved as the beneficiaries could be government officials linked to the developers. To evade supervision, these officials usually buy the apartments in the names of their families or friends.

In other cases, he said, large transactions at lower prices could be a trick played by the developers who wanted to raise loans from banks.

Nation

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Cheap homes spark corruption fears

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