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04-11-11, 02:32
http://www.straitstimes.com/PrimeNews/Story/STIStory_729880.html
CHINA PROPERTY CURBS
Zhuhai caps pricing for homes
Developers asking for more than the price ceiling will be denied sale permits
Published on Nov 3, 2011
SHANGHAI: The southern city of Zhuhai has set a cap for home prices at 11,285 yuan (S$2,264) per sq m, in what appears to be the most extreme property price-tightening measure imposed by Chinese cities so far.
Developers asking for a price higher than that will be refused the permits to sell their projects in the market.
The move, announced late on Tuesday, came after Premier Wen Jiabao stressed that China would 'unswervingly' maintain its property curbs, and urged local governments to continue with their own tightening measures.
A statement by Zhuhai's housing bureau described the price ceiling as its home price control target for this year, but did not indicate when it could expire. The statement also said that local families can only buy one more home unit in the main urban area, while non-local households would no longer be allowed to do so.
Zhuhai, which has a population of 1.6 million, is the fourth city in Guangdong province to impose tough home purchase restrictions after Guangzhou, Shenzhen and Foshan.
Analysts say the price cap has effectively killed the luxury housing market in the affluent city.
Data from the local real estate association showed that the average home price in Zhuhai's main urban district was 10,155 yuan per sq m last year.
The city's home prices last month rose 0.08 per cent on average from a month earlier to 10,508 yuan per sq m, the Wall Street Journal reported, citing a survey by China Real Estate Index System, a private-market data provider.
'I don't think the central government dictated the price limit, though Zhuhai may have faced some pressure (from Beijing),' the Wall Street Journal quoted Credit Suisse analyst Du Jinsong as saying.
'Zhuhai has set a much stricter price limit than other cities to meet its annual target of average home prices, which is the simplest way to rein in price growth.'
The Premier's weekend remarks prompted the Guangzhou authorities to abruptly cancel a land auction for a major new development on Tuesday.
Some analysts said the cancelled land sales, while not unusual in Guangzhou, could have been caused by poor pre-sales bids, with developers now hobbled by tight financing.
'It's something that people have been expecting because people know the cashflow positions of major developers are very, very tight,' said Mr Alan Chiang, head of residential property in China for property consultancy DTZ. 'It's very difficult to get financing these days.'
Some of the larger sites, including a mixed residential and commercial plot of 20,241 sq m with a pre-sale starting price of 1.13 billion yuan, were to form part of a new 36 sq km business and exhibition hub on the southern fringes around a new high-speed railway station linking Guangzhou to Hong Kong and other cities.
With the Guangzhou government now 'facing a severe real estate market adjustment and an unfavourable initial sale, it will cause industry concerns about the future prospects for this high-speed model of development', according to the Southern Metropolis Daily.
After a slew of measures by Beijing's leaders since late 2009 to rein in surging property prices - a potential trigger for social unrest - residential transaction volumes have dropped since September, and some developers have slashed prices for new developments in cities such as Shanghai.
A private survey earlier this week showed that the average home price in China's 100 key cities fell 0.23 per cent last month from a month earlier.
'Reasonable cooling and price correction in the property market are welcome by governments, but a collapse is ill-affordable,' wrote Citi in a Tuesday note that predicted another 10 to 15 per cent fall in real estate prices in first-tier cities such as Guangzhou in the fourth quarter.
Combating inflation remains China's top priority, although Beijing has started to increasingly stress the flexibility of policies due to many uncertainties at home and abroad, particularly the current euro zone debt crisis.
REUTERS
CHINA PROPERTY CURBS
Zhuhai caps pricing for homes
Developers asking for more than the price ceiling will be denied sale permits
Published on Nov 3, 2011
SHANGHAI: The southern city of Zhuhai has set a cap for home prices at 11,285 yuan (S$2,264) per sq m, in what appears to be the most extreme property price-tightening measure imposed by Chinese cities so far.
Developers asking for a price higher than that will be refused the permits to sell their projects in the market.
The move, announced late on Tuesday, came after Premier Wen Jiabao stressed that China would 'unswervingly' maintain its property curbs, and urged local governments to continue with their own tightening measures.
A statement by Zhuhai's housing bureau described the price ceiling as its home price control target for this year, but did not indicate when it could expire. The statement also said that local families can only buy one more home unit in the main urban area, while non-local households would no longer be allowed to do so.
Zhuhai, which has a population of 1.6 million, is the fourth city in Guangdong province to impose tough home purchase restrictions after Guangzhou, Shenzhen and Foshan.
Analysts say the price cap has effectively killed the luxury housing market in the affluent city.
Data from the local real estate association showed that the average home price in Zhuhai's main urban district was 10,155 yuan per sq m last year.
The city's home prices last month rose 0.08 per cent on average from a month earlier to 10,508 yuan per sq m, the Wall Street Journal reported, citing a survey by China Real Estate Index System, a private-market data provider.
'I don't think the central government dictated the price limit, though Zhuhai may have faced some pressure (from Beijing),' the Wall Street Journal quoted Credit Suisse analyst Du Jinsong as saying.
'Zhuhai has set a much stricter price limit than other cities to meet its annual target of average home prices, which is the simplest way to rein in price growth.'
The Premier's weekend remarks prompted the Guangzhou authorities to abruptly cancel a land auction for a major new development on Tuesday.
Some analysts said the cancelled land sales, while not unusual in Guangzhou, could have been caused by poor pre-sales bids, with developers now hobbled by tight financing.
'It's something that people have been expecting because people know the cashflow positions of major developers are very, very tight,' said Mr Alan Chiang, head of residential property in China for property consultancy DTZ. 'It's very difficult to get financing these days.'
Some of the larger sites, including a mixed residential and commercial plot of 20,241 sq m with a pre-sale starting price of 1.13 billion yuan, were to form part of a new 36 sq km business and exhibition hub on the southern fringes around a new high-speed railway station linking Guangzhou to Hong Kong and other cities.
With the Guangzhou government now 'facing a severe real estate market adjustment and an unfavourable initial sale, it will cause industry concerns about the future prospects for this high-speed model of development', according to the Southern Metropolis Daily.
After a slew of measures by Beijing's leaders since late 2009 to rein in surging property prices - a potential trigger for social unrest - residential transaction volumes have dropped since September, and some developers have slashed prices for new developments in cities such as Shanghai.
A private survey earlier this week showed that the average home price in China's 100 key cities fell 0.23 per cent last month from a month earlier.
'Reasonable cooling and price correction in the property market are welcome by governments, but a collapse is ill-affordable,' wrote Citi in a Tuesday note that predicted another 10 to 15 per cent fall in real estate prices in first-tier cities such as Guangzhou in the fourth quarter.
Combating inflation remains China's top priority, although Beijing has started to increasingly stress the flexibility of policies due to many uncertainties at home and abroad, particularly the current euro zone debt crisis.
REUTERS