Measures to target property firms in Beijing

BEIJING—The central government’s next steps to cool the nation’s overheated property market will be targeted at real estate enterprises, according to local media.
Investigations have been launched into more than 300 real estate projects in Beijing, China Business News quoted Li Wenjie, general manager of Beijing Centaline Real Estate Agency, as saying.
Li said that the central government took the step after previous financial measures to rein in soaring housing prices had little impact. The investigation aims to crack down on malpractices by real estate enterprises, such as illegal acquisition of land and tax evasion.
Several governmental departments, including the Ministry of Construction, the Ministry of Land and Resources, the Ministry of Finance and the China Banking Regulatory Commission, will carry out investigations, Li said.
Beijing’s municipal bureau of land and resources and bureau of construction did not confirm the news yesterday.
Zhu Zhongyi, chairman of China Real Estate Association, said supervision of real estate enterprises has always been part of the nation’s efforts to regulate the industry. According to a notice released by the Ministry of Finance earlier this month, 39 real estate enterprises have been caught concealing their profits.
The Beijing Municipal Bureau of Land and Resources announced on November 2 that it would investigate and punish at least 30 real estate projects that are suspected of illegally occupying land by the end of the year.
“Real estate enterprises in Beijing are healthy as a whole,” said Zhang Junyao, vice-chairman of the Beijing Real Estate Association. “They have made great contributions to the capital’s economic development in recent years.”
“Real estate has become one of Beijing’s pillar industries and will continue to grow together with our country’s economy,
“The municipal government has adopted measures to standardize the real estate market and some of them are quite successful,” he said.
Zhang admitted that the efforts to stabilize housing prices in Beijing have achieved little success, but “vigorous demand for houses in major cities is the most essential factor behind the rising prices,” Zhang said.
According to statistics jointly released by the National Development and Reform Commission and the National Bureau of Statistics, the average price of new houses in 70 major cities in October increased by 6.6 per cent over the same period in 2005.
In October, Beijing’s average housing price increased by 10.7 per cent over the same period last year, the fastest growth rate in the country, followed by Xiamen (10.5 per cent) and Shenzhen (9.9 per cent). Since the beginning of this year, the Beijing municipal government has adopted a series of measures to cool down the market.—Agencies