Policy ducks housing speculation
12/12/2003 14:40
The news about a possible legal limit on the trading of pre-sold
commercial housing has immediately dampened the enthusiasm of investors,
eastday.com reported today. However, its impact on the whole housing market is
still hard to tell.
In a newly built housing block near the Zhongshan Park,
more than 90 percent of the holders of the pre-sold home trading agreements
refused to pay the total bill as contracted. They said they were waiting to see
whether the policy would influence their interests.
In another housing block
under construction near Suzhou Creek, group buyers from Wenzhou retreated at
learning the news, dampening the buying mood for such upscale estates of 13,000
yuan per square meter and above.
The news affected speculators most, the
developer indicated, because the buyers of the pre-sold agreements are mostly
speculators. The Wenzhou speculators have earned millions of yuan by trading
such agreements, so this time, they retreated decisively for fear of possible
loss. Apparently, they don't see the policy change as good news.
As to
whether the policy will cause a collapse in the whole market, industry analysts
compared the situation with that of Hong Kong in 1996 to find some clues.
The 1996 Hong Kong housing rule made it compulsory that traders can only
change the owner's name on the housing contract, not the pre-sold agreement. The
ban resulted in the immediate collapse of the Hong Kong pre-sold housing market,
funneling huge amounts of money to the trading of the completed flats and
company buildings.
Likely here, the policy impact is immediate, but the whole
housing market might still be hopeful, they estimated.
Vicky Xu / Shanghai Daily news
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