Beijing Targets High Pressure Tactics for Selling Homes Near Desirable Schools

Beijing’s housing authority is again cracking down on real estate brokers’ sales tactics that focus on proximity to desirable schools, including social media posts designed to drive education-obsessed parents into a buying frenzy.

Targeting the promotion of so-called “school district houses” shows the lengths that authorities are willing to go to keep a lid on local home prices, as the crackdown pits the central government’s goal of curbing property speculation against the desires of urban parents who are more than willing to pay inflated property prices to get their children into the best schools.

The Beijing Municipal Commission of Housing and Urban-Rural Development announced Thursday that it is cracking down (link in Chinese) on speculative practices in the real estate industry that violate regulations or the law, mentioning school district houses in particular.

The commission is specifically going after misleading information contained in listings for such homes, such as inflated prices. It said that real estate brokers often also publish articles on WeChat that can “trigger panic purchasing” among homebuyers.

In China, where children can go to school often depends on where they live, so homes near reputable schools usually come with a higher price tag. The situation has led home prices to skyrocket in entire neighborhoods close to well-known schools. In Beijing, for example, an old apartment near to one of the city’s best schools can sell for as much as 170,000 yuan ($26,000) per square meter, almost triple city’s overall average housing price of about 60,000 yuan per square meter, according to real estate information platform Anjuke.com.

Beijing has already made several moves in its campaign to hold down home prices. In March, it suspended and fined two real estate brokers as part of a sweeping inspection of more than 100 brokerages to uncover misleading advertising in listings for homes near desirable schools.

In a broader measure to prevent surging prices of school district houses from inflating overall home prices in the city, Beijing put new rules into effect on Jan. 1, 2019, that no longer guarantee that homeowners will be eligible for enrollment in certain schools based on where they live.

 Read more  
Shanghai Tackles Housing Boom With Focus on Prices in Areas With Good 

Shanghai, meanwhile, has also tightened scrutiny over speculation on school district houses. In March, the city’s housing authority said that the Shanghai Real Estate Broker Trade Association, a local industry group, had launched a campaign to prevent sellers from using a home’s proximity to a school as a selling point in their advertising.

The Shanghai authority said that 14 major real estate brokers, including Lianjia, have agreed to stop using the term “school district houses” in their promotions.

Denise Jia contributed to this report.

Contact reporter Timmy Shen (hongmingshen@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

Download our app to receive breaking news alerts and read the news on the go.

Follow the Chinese markets in real time with Caixin Global’s new stock database.