New restrictions on realtors

11:13, April 21, 2010      

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The housing regulator Tuesday issued new measures aimed at preventing property developers from artificially driving up prices so as to better protect consumer's rights, following the government's efforts to curb soaring housing prices.

The Ministry of Housing and Urban-Rural Development announced Tuesday it will tighten the supervision of presales activities by property developers, including shoring up requirements on housing price transparency.

"The property developers should publish housing information, including prices, within 10 days of getting the presales license," the ministry's statement said.

It said the price should be strictly consistent with the planned price filed with the regulator.

Before getting a presales license, developers are not allowed to take cash or any form of payment from potential buyers in exchange for the right to buy or reserve a house.

The measures came as some property developers were found deliberately stockpiling houses in order to push up prices, misleading consumers with relatively low listed prices, and charging fees for a VIP card or a promise to reserve a house.

Hundreds of consumers waited in a long line overnight for a chance at a newly con-structed apartment building in Dalian, Northeast China's Liaoning Province, the Peninsula Morning Post reported April 6.

"Many property developers don't fix the prices when houses under construction are offered for sale," said Zhang Haiqing, a property analyst with Centaline Property Research Center.

They often charge VIP fees, sometimes as high as 50,000 yuan ($7,324), for a set of houses, in order to collect customers' information and better gauge market demand, she noted.

A property developer may have 200 housing units, but if it sells more VIP cards than the number of houses available, it can set a higher housing price when opening for sales, Zhang noted.

Those who pay for the VIP cards often need to wait in long lines in order to get a chance to buy a house.

"Realty developers and brokers who promote buying houses themselves and make a false boost in sales (prices) will suffer serious penalties," the ministry said, without indicating what the penalty would actually be. "The key is the implementation," Zhang said.

She said such measures have been announced before, but didn't curb the bad behavior of developers.

Buyers must also register when purchasing houses, and can't freely change the name of the buyer after the purchase, according to the ministry.

The measure will provide a basis for commercial banks to determine who actually is buying second or more properties.

Source: Global Times


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