Chinese School - Guangzhou gets tough on real estate developers

BIZCHINA / Center

Guangzhou gets tough on real estate developers

By Zhan Lisheng (China Daily)
Updated: 2007-04-10 08:47

The real estate market here is to face closer scrutiny following the
launch yesterday of a new campaign by municipal authorities.

The campaign will involve 11 government departments, which are
responsible for the city's development and reform, construction, land
resources and housing, urban planning, pricing, industrial and commercial
administration, statistics, auditing, finance, taxation and governmental
administration supervision.

Ouyang Yongsheng, a spokesperson for the municipal government, said the
campaign will expose firms' tricks and misbehavior relating to property
developments, marketing and sales activities.

He said special emphasis would be placed on whether developers had
illegally hoarded land for speculation, driven up prices by releasing
false information or by cornering a market, disobeyed the city's overall
urban planning regulations, used pricing tricks, released for sale
properties that had yet to pass official inspections and receive
approval, or acted against the State's taxation policy to prevent
speculative apartment purchases.

Yongsheng said the campaign will run for a month and that officials would
conduct thorough investigations of the city's real estate companies.

"Property developers that are found to have used dirty tricks in their
business operation will be urged to make rectifications within 10 days.
Those who refuse to do so will be dealt with according to the law," he
said.

"The move is an inseparable part of the municipal authorities' measures
to curb the city's rising house prices," Yongsheng said.

"The government wants to keep prices at a rational level so that most
citizens can afford to buy their own homes."

Other measures the city government has taken recently include the
expansion of land supplies by 5 sq km over the next couple of years, an
investment of 1.5 billion yuan ($194 million) to build "economical
houses" for 5,643 low-income families this year, reclaiming unused land,
streamlining procedures for housing approval and releasing house prices
on time.

Many people, especially those who have not yet bought a house, have
applauded the tough new measures.

Gao Weijie, who works in advertising, told China Daily: "House prices in
Guangzhou have surged to an unbearable high. I hope rather than wish that
the government's series of measures is effective in bringing them down or
at least keeping the growth rate reasonable."

In February, the average price of an apartment in Guangzhou was 7,729
yuan ($1,000) per sq m, compared with 3,888 yuan ($498) per sq m in 2003.

Han Shitong, an analyst with the Guangzhou Real Estate Association, said
that the measures would at least cultivate potential house buyers'
wait-and-see attitude.

"If the measures are implemented by the book, the price should definitely
drop," Han said.

(For more biz stories, please visit Industry Updates)

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