A home buyer photographs a model of a housing development at a real estate sales center in Beijing in January. Photo: CFP
A day after the Beijing municipal government announced new home-purchasing restrictions on Friday, local authorities started inspecting several property projects and real estate agencies, media reports reported on Saturday.
The Beijing Municipal Commission of Housing and Urban-Rural Development on Saturday carried out random inspections at several property projects and agencies and turned up irregularities at some projects and misconduct at some agencies, The Beijing News reported on Saturday.
Inspectors discovered the sales information for several projects developed by Beijing Daoxiangsiji Property Development Co and Beijing Xinyide Property Development Co was incomplete and nonstandard, the report said.
Also, they found false entries on the books at one branch of the Beijing-based property agency 5i5j.com Corp in Haidian district.
The commission will punish the offending agencies with administrative penalties after further investigation, according to the report.
New regulation for real estate agencies is sorely needed because they have played such a large role in driving up domestic home prices in recent years, experts said.
In some cases, real estate agencies have hired people to stand in line in front of housing project offices to create a false impression that properties are in high demand, said Liu Dingding, a Beijing-based independent industry analyst.
"This kind of tactic, which is commonplace, is against the rules," Liu told the Global Times on Sunday. "The Chinese government is expected to tighten regulations over the industry."
In Dongguan, South China's Guangdong Province, the local government on March 15 announced new rules for local real estate agencies. It plans to set up a housing agency expert database to clamp down on price rigging and down payment loans, among other problems, according to a report on the news portal sohu.com on Sunday.Tighter regulations
For the last five months, Beijing authorities have been carrying out inspections at branches of the Lianjia real estate agency, said an employee surnamed Zhang, who works at a Lianjia branch in Chaoyang district. She noted that the company also conducts its own investigations.
"The inspections became stricter after February," she told the Global Times on Sunday. "For example, Lianjia sometimes inspects some of its branches two or three times a week, aiming to check whether newly opened branches have qualified certificates or housing resources are real."
Lianjia moved one of its cooperative bank staff out of its Chaoyang branch about five months ago because the government was looking into the branch, said an employee of a State-run bank that works with Lianjia to offer home loans to buyers. The employee refused to be named.
"In 2016, it was reported that Lianjia was providing down payment loans to its clients, which allegedly encourages speculation," the bank employee told the Global Times on Monday.
To regulate the real estate agencies, the government is expected to institute measures to scrutinize online housing information released by property agencies.
"The authorities will examine the information before the agencies post it online," Liu said.
By putting forward a new round of restrictions on home purchasing and ownership in recent weeks, the government has shown it is determined to stabilize the domestic housing market and crack down on speculative buying, experts said.
On Friday, Beijing unveiled new home-purchasing restrictions. The municipal government will raise the minimum down payment requirement for second homes from 50 percent to 60 percent of the property's price. It will also prohibit banks from offering mortgages with terms of 25 years or longer.
Liu said that housing in first-tier cities has turned into a financial product in many people's eyes, which has encouraged speculation.
Smaller cities such as Qingdao, East China's Shandong Province; Baoding, North China's Hebei Province and Sanya, South China's Hainan Province, have also tightened home-purchasing restrictions in recent weeks.
The restrictions aim to back up what President Xi Jinping
said at the Central Economic Work Conference
held in December 2016: "Homes are for living, not for speculation," according to Yin Bocheng, director of the Shanghai-based Real Estate Research Center at Fudan University.
The government is expected to institute a property tax to stabilize the domestic housing market and curb speculative buying, Yin said.
"But it is unlikely the policy will be rolled out before 2020 because many uncertainties still remain, such as which standards to use and what rate to set," he told the Global Times on Monday.Commercial appeal
After the Beijing municipal government unveiled the new restrictions on Friday, home sales ground to a halt, according to the Lianjia employee surnamed Zhang.
"Our branch didn't make one deal over the weekend," Zhang said. "In February, our team made more than 10 deals."
A Beijing-based independent property agent surnamed Wang forecast that Beijing's housing market will stabilize, though home prices are unlikely to drop.
"The newly revealed housing restrictions will definitely put pressure on home buyers, but it will create a growth opportunity for commercial housing as the purchase of commercial properties does not require household registration or limits on the number of properties that owners can hold," Wang told the Global Times on Sunday.
"The prices of some commercial housing projects in Beijing have soared over the last few weeks," Wang noted.
Given the current realities of the domestic housing market, there is now great growth potential in the home rental market, chinanews.com reported Sunday, citing Lianjia chairman Zuo Hui.
China's home rental market is valued around 1 trillion yuan ($144.9 billion), while the trading market reached 17 trillion yuan - representing a leasing-trading ratio of only 6 percent, far less than Japan's 80 percent and the US' 50 percent, according to the report.
In fact, the average rent in China's first-tier cities is not expensive compared with some cities in the US and Europe.
The rent in China is about 30 percent less than the cities in the US and Europe, said Liu, the independent analyst. He forecast that rent prices in China will shoot up in the future.
In addition, with the rapid pace of urbanization in China, renting homes will become increasingly popular as more people from rural areas flow into first- and second-tier cities, Liu said.