Pre-sales targeted to curb China's property market
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China's government tightened its squeeze on the property market Tuesday, restricting pre-sales by developers, in a further measure to curb soaring property prices.
Developers were no longer permitted to receive downpayments for unfinished properties unless they have obtained government approval for pre-sales, the Ministry of Housing and Urban-Rural Development said in a statement issued on its website Tuesday.
The ministry also ordered developers to publish prices of each unit within 10 days of receiving approval for pre-sales.
The regulation was enacted to prevent developers hoarding property illegally to push up prices, the ministry said, adding it would punish developers that violated the rules.
The government unveiled a series of measures last week to rein in soaring prices, which rose 11.7 percent year on year in March in China's 70 large and medium-sized cities, the highest growth since July 2005.
The measures included steeper downpayments and increasing land supply. The government also said over the weekend that banks were allowed to refuse loans for third home purchases.
Also Tuesday, the China Insurance Regulatory Commission (CIRC) said insurers were barred from investing in the real estate market before detailed rules governing such investments were issued.
The CIRC said the specific rules would be introduced at "proper" time.
The government approved insurers to invest in real estate sector in line with the amended Insurance Law of 2009. However, the detailed implementation measures have yet to be released.
The People's Bank of China, the central bank, said on its website that financial institutions lent 845.7 billion yuan (123.9 billion U.S. dollars) in new loans for property in the first quarter.
By the end of March, the total outstanding loans on the property market rose 44.3 percent from a year ago. Outstanding loans to property developers rose 31.1 percent and to home purchasers 53.4 percent, the central bank said.
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