Caixin
Oct 19, 2016 06:34 PM
PROPERTY

Shanghai Hits Developers Over Unauthorized Home-Price Hikes

(Beijing) — The Shanghai government has punished eight property developers for increasing home prices without notifying authorities — the city's latest move to cool the overheated property market.

The property developers were suspended from signing contracts with home buyers after regulators found that the companies had increased prices "without authorization," the Shanghai government said on its official WeChat account on Tuesday.

In China, real estate developers are required to register home prices with the local price bureau before a sales launch. If property companies want to change the prices later, they have to notify the authorities, and the change must be within a certain range, depending on the city. But the policy has not been strictly enforced.

Now, as home sales and prices soar in first- and second-tier cities, the Shanghai government has turned to the policy, along with other measures, in a bid to rein in the housing market.

Seven real estate agencies also were punished, for forging records of home sales and misleading customers, the government said.

The latest data from the National Bureau of Statistics showed that home prices in Shanghai rose 5.2% in August compared with the previous month, the second-highest growth among 70 cities. Rumors that further home-purchase restrictions would soon be imposed in the city had couples flocking to marriage registration offices to file for divorce in late August, believing that as unmarried people, they would remain eligible to buy a second home.

Shanghai has some of the toughest restrictions on home buyers in China. Under rules that city authorities released in March, residents who do not have a Shanghai hukou — a household registration permit — have to show they have had a pension and medical insurance plan in the city for at least the past five years before they can buy a home there. Also required is a down payment of at least 70% for second homes larger than 140 square meters or worth more than 4.5 million yuan ($668,000).

Contact Chen Na (nachen@caixin.com); editor Kerry Nelson (kerry@caixin.com)

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