Cities like Beijing, Shanghai and Xiamen are easing restrictive policies for luxury property that aimed to cool an overheated market.
Statistic show that the medium and high-end properties account for more than 30% among the 36 ‘to be sold’ properties in Beijing this month.
Shanghai’s city government became the second in two months to allow more luxury properties into the market, real estate agents and developers said.
Xiamen has already canceled the restriction policy for purchasing high-end properties whose prices are above five million yuan, revealed by some senior leaders from property companies.
Any move to drive up home prices in China, which are already near record levels, can be controversial. The Central Government prefers that local authorities help curb property speculation because it fears unaffordable housing could cause social unrest.
A project developed by Shenzhen Overseas Chinese Town Co. Ltd. in central Shanghai recently gained selling approval to set prices close to 300,000 yuan (US$48,400) per square meter, a record in the financial center, according to online marketplace SouFun.
“We have seen new projects setting prices above 100,000 yuan in the past few months,” said Thomas Lam, senior director at realtor Knight Frank. “It’s a signal that the government is not implementing the administrative measures as strictly as it once did. It knows there’s still a demand for luxury housing.”
Developers also said it is much easier to get pre-sale approval and sell to buyers who are switching homes.
Some local governments are also allowing people to buy more than one home, which earlier had been prohibited. Some Chinese cities have also tried to limit property price cuts to 15-20 percent from the original asking price, developers and real estate agents said in May, in a bid to slow a steeper industry downturn and boost confidence in the market.