Dandong clamps down on home speculation

Top News | Tracy Hu 14 Jun 2018

Real-estate developers in Dandong in northeastern China are being urged by the local government to promise to keep property prices unchanged in the border city following the US-North Korea summit.

Authorities will require local developers to sign a joint agreement to ensure they will not jack up home prices amid the surging demand, a statement by Dandong's municipal government said.

The statement said the local authority insists on the concept of "houses are for living, not for speculation," which President Xi Jinping had said to put a lid on the country's soaring property prices during the 19th Communist Party Congress last year.

Dandong, a city of 2.4 million people in Liaoning province, which borders North Korea, came into the spotlight in the residential market even earlier than the summit.

Buyers and speculators across the country in the past months flocked to the city to snap up properties as they bet on the positive outcome for Dandong if Pyongyang pledges to rebuild its economy by opening up.

People saw the prospect of new economic opportunities spurred by cross-border business after North Korean leader Kim Jong Un said he had suspended all missile tests and would shut down a nuclear test site in April.

Home prices in Dandong were earlier reported to soar by 50 percent in just two days as the city is deemed to benefit the most if North Korea opens up.

First-hand flat prices surged from between 3,000 yuan (HK$3,679) and 4,000 yuan per square meter to between 6,000 yuan and 7,000 yuan per square meter, according to statistics from several property agent websites.

But it remains unclear if the city will finally turn into a second Shenzhen in terms of its housing prices - which many investors and local businessmen are anticipating - as the local government has introduced a series of policies to tighten its residential market.

Last month, guidelines were issued to restrict speculators and non-local buyers. Non-local residents are not allowed to resell newly built homes within two years of purchase, according to a government announcement.

Among the non-local buyers, most are from Zhejiang and Guangdong, which are the wealthier provinces of southern China, mainland media have reported.

The Dandong government also requires higher downpayments of at least 50 percent for buyers applying for mortgages through the housing provident fund outside of the city.

tracy.hu@singtaonewscorp.com

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