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Top Biz News

Capital may get 'one apartment, one price' policy

By Shen Jingting (China Daily)
Updated: 2010-03-05 13:25

Beijing may soon require real estate developers to reveal the price of each individual apartment in their projects.

The Beijing Municipal Commission of Housing and Urban-Rural Development is considering making real estate dealers publicly disclose the specific cost of every apartment in a development, three days after it gets pre-sale approval, Beijing Daily reported.

Most developers currently just disclose an average apartment price for the entire development.

The policy, if it is actually implemented, would be similar to the 'one apartment, one price' regulation in Guangdong province, which took effect in late February and also requires developers there to offer all the apartments in a project for sale within 10 days of pre-sale approval.

Industry insiders said the potential move may help cool the soaring prices of new apartments in Beijing.

"Currently, real estate developers only give the average price for a property, even though apartments on different floors, with different layouts, have different prices," said Zhang Yue, market researcher at Homelink, a property agency.

"If property dealers have to make the price of each apartment public, apartments that are not bought up quickly will likely drop in price, allowing consumer demand to play a greater role in deciding real estate prices than it does now," Zhang added.

She also said that housing prices were irrational last year.

"Even if an apartment was not good and nobody showed interest in buying it, its price would still climb," Zhang said.

If there were two types of apartments for sale in the same real estate development last year, for example, and one type was selling well and the other was not selling at all, the price of both types of apartments would have kept rising because the market was, and the property would have been, considered hot, said Zhang.

This type of situation, which was common last year, would probably not happen at all if the Beijing authorities adopt the proposed policy, Zhang said.

The policy might also help establish a clearer standard for secondhand home prices, she added.

"Second-hand home prices are largely based on the average prices of new apartments in the neighborhood. Owners may not be able to ask for prices as high as they do now if prices are more specific and more transparent," Zhang said.

"But I doubt whether the policy will be come out soon," she said.

Zhao Yang, researcher at Property Study Center of Peking University, said the rule, even if implemented, is unlikely to cover the entire city.

But authorities seem to understand they must do something to curb rising apartment costs. The Beijing Municipal Commission of Housing and Urban-Rural Development fined nine property developers a few days after the Spring Festival, for "storing apartments and not having transparent prices".