Presale houses cause problems for buyers, developers
Source: Xinhua |
October 20, 2012, Saturday
|
Print Edition
Print Edition
THE common housing practice of selling homes before construction is completed, known as presales, is causing problems for both buyers and developers.
"The problem is that after buyers pay for their future home, they cannot monitor the quality," said Cao Jing, a resident of Jinan, capital of Shandong Province.
Cao bought a house in 2009. But in 2010, when she moved in she found cracks in the walls and a water leak in the bathroom, as well as a problem with the electrical wiring.
"Changing the wiring is not easy, as it is inside the walls," she said. "If we choose to buy a completed home, we can check for such problems and then decide to buy or not."
Presales have also caused problems for developers, as early-bird buyers get upset if a developer later lowers prices for promotional purposes.
Wan Chengliang, a vice general manager of a property firm in Jinan, said one of his company's apartment projects initially sold for 6,000 yuan (US$959) per square meter, but later the price dropped to 5,300 yuan. "Many early buyers came back to demand the price difference," he said.
Experts estimate that presale transactions account for around 70 percent of new housing sales in China.
However, some believe the practice is unfair, as money paid by home buyers for future homes gets turned into original capital for developers, who can then push housing prices higher by intentionally delaying sales.
Xia Geng, vice governor of Shandong, said some presale houses have not been delivered to buyers on time, which has led to complaints.
Xia stressed the presale system should be improved while sales of decorated houses be encouraged in the future.
Guo Songhai, head of the real estate research institute at Shandong University of Finance and Economics, said: "Selling more complete houses will be healthy for the market."
"The problem is that after buyers pay for their future home, they cannot monitor the quality," said Cao Jing, a resident of Jinan, capital of Shandong Province.
Cao bought a house in 2009. But in 2010, when she moved in she found cracks in the walls and a water leak in the bathroom, as well as a problem with the electrical wiring.
"Changing the wiring is not easy, as it is inside the walls," she said. "If we choose to buy a completed home, we can check for such problems and then decide to buy or not."
Presales have also caused problems for developers, as early-bird buyers get upset if a developer later lowers prices for promotional purposes.
Wan Chengliang, a vice general manager of a property firm in Jinan, said one of his company's apartment projects initially sold for 6,000 yuan (US$959) per square meter, but later the price dropped to 5,300 yuan. "Many early buyers came back to demand the price difference," he said.
Experts estimate that presale transactions account for around 70 percent of new housing sales in China.
However, some believe the practice is unfair, as money paid by home buyers for future homes gets turned into original capital for developers, who can then push housing prices higher by intentionally delaying sales.
Xia Geng, vice governor of Shandong, said some presale houses have not been delivered to buyers on time, which has led to complaints.
Xia stressed the presale system should be improved while sales of decorated houses be encouraged in the future.
Guo Songhai, head of the real estate research institute at Shandong University of Finance and Economics, said: "Selling more complete houses will be healthy for the market."
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