SHANGHAI — Shanghai’s real estate regulator will start verifying the listing prices of secondhand residential properties in a bid to curb real estate agencies “disturbing the market.”
The Shanghai Housing Administration Bureau announced the measure at a meeting on Friday, vowing to crack down on practices that drive up property prices. Any listing can only be made public after receiving the bureau’s approval, “to make sure the prices are based on the real market situations,” it said.
As of December, the bureau requires real estate agencies to submit their listings for verification of their authenticity in order to reduce false advertising.
Last year saw prices and the transaction volume of Shanghai’s secondhand homes rise significantly, especially in the second half. To cool the market, local authorities issued new rules in January to make it harder to avoid paying taxes on home sales as well as to curb people faking divorces to circumvent real estate restrictions.
Coinciding with such policies, the transaction volume of secondhand homes in the city dropped 37.4%, comparing June with January. Prices, however, rose by 5.1% on average.
A manager surnamed Fu at a Pudong New Area office of leading real estate firm Lianjia told Sixth Tone that “the series of measures announced by city authorities this year could mean our business will remain low for a relatively long period.”
Although prices of the apartments listed for sale on Lianjia’s app remain unchanged, Fu, who had not been authorized to be interviewed, said it won’t take long before authorities begin to verify prices and potentially remove many listings.
The one-bedroom apartments Fu’s office often sells are typically priced at above 200,000 yuan ($30,900) per square meter. “After pricing verification is implemented, the listed rates will probably drop by between 30% and 50%,” Fu estimated.
Lu Wenxi, chief analyst at Shanghai Centaline Property Agency, told Sixth Tone he thinks the measure won’t affect most homes, but will have a significant impact on market expectations.
“The new measure targets properties that have seen their prices soar unreasonably high — such extreme cases have happened mostly with residential compounds in desirable school districts,” Lu said.
China has for years tinkered with the rules for buying properties in its most desirable cities under the slogan “homes are for living in, not for speculating.”
In a move similar to Shanghai’s, Shenzhen in February issued a notice stating that the pricing of secondhand homes should be based on actual transaction prices recorded at the city’s property trade centers and the prices of new homes in the same area. The southwestern city of Chengdu implemented the same rule a month later.
Contributions: Zhuge Rongrong; editor: Kevin Schoenmakers.
(Header image: A woman looks at listings outside a real estate agency in Shanghai, Oct. 25, 2020. People Visual)