The move by some homeowners in Guangzhou to collude on inflating prices has infuriated the housing watchdog, which is initiating stringent measures to cool the recent run up in property prices in one of the main Greater Bay Area cities.
The Housing and Construction Bureau of Guangzhou said on Wednesday it was carrying out special rectification measures to maintain order in the property market and protect buyers’ rights. The regulator also said it would crack down hard on those jacking up home prices, posting fake property information and resorting to advertisement and sales gimmicks.
The crackdown followed after some messages circulating on the WeChat social media platform by a group claiming to be “homeowners of Blossom Cove” urged all residents whose flats were on the market to raise the asking price to a minimum of 150,000 yuan (US$2,320) per square metre.
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Market observers said Guangzhou’s homeowners have become “overexcited” by property investors betting on the future of the provincial capital of Guangdong, the crucible of the Greater Bay Area, a national scheme to integrate nine Chinese cities with Hong Kong and Macau to create an economic powerhouse to rival Silicon Valley.
They said the 150,000 yuan level would be 25 per cent more than the average selling price of 120,000 yuan in Blossom Cove in the CBD Zhujiang New Town district, which is only 20 minutes by car from the Guangzhou high-speed railway terminus.
Currently all five available homes in Blossom Cove on Beike Zhaofang, the country’s biggest online property portal, are priced between 134,283 yuan per sq m and 155,597 yuan per sq m. Recently, a three-bedroom unit fetched 126,068 yuan per sq m.
“We’ve seen some similar moves recently by homeowners in other projects in Guangzhou who have jacked up their prices as well,” said Dick Li, general manager at Centaline Properties’ Guangzhou research unit.
The housing authority warned that it was coordinating efforts with other government departments to tighten scrutiny of new projects on sale as well as agents hosting lived-in homes to maintain stability in the city’s property.
Lived-in home prices across Guangzhou increased by 7.8 per cent to an average of 28,815 yuan per sq m last year, while transactions increased 22 per cent year on year, according to Centaline Property. In comparison, Shenzhen’s home price rose 15.2 per cent to an average of 73,320 yuan per sq m last year.
“Guangzhou, one of the four core cities in the GBA, for sure has great development potential and has attracted young professionals,” said Yan Yuejin, director of E-house China Research and Development Institution.
He said that home investors who were eyeing neighbouring Shenzhen because of its high-profile companies and favourable policies from the central government were shifting their focus to Guangzhou, where the average home price is comparatively lower.
“Because of stricter home purchase rules in Shenzhen and higher prices, homeowners in Guangzhou strongly believe that the value of their homes will increase sharply,” Yan said.
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