BEIJING: China said on Thursday it would renew efforts to crack down on property irregularities in 30 major cities from July to end-December, mobilizing powers from seven major Chinese government agencies in a concerted effort to rein in rising prices.
The country’s property market has been heating up lately, despite intensifying official curbs, prompting several local governments to announce new rules this month to limit companies from purchases.
China’s new home prices in May posted their fastest growth in nearly a year, extending their 38 months of price appreciation. More than 100 cities had tightened the market to varying degrees over the past two years.
The market’s surprising resilience underscores rampant fraud in the sector that has allowed buyers to skirt existing restrictions, and contrasts with persistent stock market weakness as tensions with the United States over trade dims China’s economic outlook.
Chinese shares fell to new two-year lows on Thursday, staying on course for their worst monthly performance in years.
China’s property market began to boom in early 2016 after the central government pumped up credit and relaxed housing curbs to stabilise the economy in the wake of the 2015/2016 stock market crash.
The crackdown, which would be carried out by government entities including the housing ministry and the Ministry of Public Security, and the banking and insurance regulators, would focus on stemming speculation, cracking down on illegal agencies and developers, and fake advertisements.
A notice published on the housing ministry’s website said targeted irregularities include manipulating prices, deliberately holding off sales, illegally providing loans for down payment and publishing false price information that mislead buyers.
The four largest top-tier cities, including Beijing and Shanghai, and provincial capitals such as Wuhan and Chengdu, and also smaller cities, such as Yichang and Foshan, are among the 30 that will be scrutinised, the notice said.
While policymakers have been adamant in controlling run-away prices, they have also been careful not to tap on the brakes too hard, as real estate remains a major driver of the economy. Growth in the world’s second-largest economy is at risk of slowing as the authorities try to tame rapid domestic credit growth at a time when a full-blown trade war with the United States could hurt the economic outlook.
The United States will begin collecting 25 percent tariffs on $34 billion worth of Chinese goods starting on July 6, and will take steps to launch tariffs on 284 new product lines.
To cushion the economy, China’s central bank said on Sunday it would cut the amount of cash that some banks must hold as reserves, releasing $108 billion in liquidity, to accelerate the pace of debt-for-equity swaps and spur lending to smaller firms.
While the People’s Bank of China has specified the use of the funds, analysts and economists are concerned that some would inevitably flow into “unproductive, traditional sectors” such as real estate.
“The phenomenon of chaotic debt issuance and overly stimulating the property market make us worried that China’s economy is back to the traditional (credit-fuelled) development model,” researchers at Bank of China said in a report.
China’s state planner said on Wednesday it would restrict real estate developers from using funds raised via foreign debt for real estate investments, warning that their overseas debt issuance had been growing too quickly. (Additional reporting by Shu Zhang Editing by Jacqueline Wong)
CHENNAI: A fortnight after verification of parent documents for new property registrations was made mandatory, registration of about 500 land documents has been rejected across the state. Of these, 350 pertained to fraudulent parent documents, while registrations for the rest could not be facilitated due to absence of parent documents. Sub-registrar offices in Chennai and suburbs witnessed highest attempt to register property using fraudulent parent documents in Tamil Nadu.
Registration department sources said sub-registrars needed to go an extra mile to ensure that submitted documents were genuine.
As per the revised rules, verification of parent documents by the sub-registrars concerned is a compulsory procedure for (property) sale deeds. The sub-registrar must sign on the first page of the parent document as a mark of completing the task with due diligence, which would be scanned and maintained in the registration department. “During such verifications, about 350 parent documents were detected to be forged,” registration department official said.
This apart, nearly 150 land registrations could be not carried out due to non-availability of parent documents for various reasons including missing owners.
Among the 500 rejected documents, according to sources, 75% were recorded in the sub-registrar offices of Chennai and its peripheries. “Fraudulent parent documents both on individual houses and plots were relatively high in the city and suburbs,” the official said. However, the sub-registrars did not file any complaint with police, sources added.
In a recent case of fraudulent creation of Power of Attorney (PoA) for a two ground property, the sub-registrar of Madhavaram in north Chennai said he had seen the parent document before facilitating the PoA. But, official sources said the parent document was not verified, and a fake PoA was registered by forging the identity proof of the original owner of the property with the connivance of the official, sources added. The crime branch police has registered a case, in which the sub-registrar has been made an accused.
The registration department mandated verification of parent documents for registering properties from June 7 to eliminate registrations using forged documents. In case the parent documents are mortgaged with banks, a statement from the financial institutions should be submitted.
Noting that a sub-registrar would be responsible for any discrepancies in property registrations under his purview, sources said they would also be held accountable and action taken.
CHENNAI: The powers of the special purpose vehicles formed under the smart city project have been enhanced in Tamil Nadu as per an order issued by the municipal administration and water supply department.
The boards formed by various smart city will have a revised financial limit for smart city projects/ proposals. The administrative sanction power for other corporations, except Chennai, has been increased from Rs 1.35 crore to Rs 3 crore.
The Greater Chennai Corporation can pass projects up to Rs 25 crore. The earlier upper limit was Rs 10 crore.
The commissioner of municipal administration can now sanction projects up to Rs 15 crore, and not Rs 6.5 crore as earlier. The same financial limits apply for the special purpose vehicles as well.
A special committee headed by the chairman and managing director of the Tamil Nadu Urban Finance and Infrastructure Development Corporation Limited, commissioner of Greater Chennai Corporation, commissioner of municipal administration and additional secretary to government (finance department) passed the order on Wednesday.
The officials from corporations have welcomed the decision as they said, this was one of the major reasons for the delay in implementation of the project.
“Earlier, we had to travel to Chennai and represent the projects in front of the high-powered project sanctioning committee. Now this will expedite the projects,” said a Coimbatore Corporation official.
HONG KONG: Hong Kong proposed a vacancy tax on empty new homes on Friday in an attempt to discourage developers from hoarding, but analysts expect the measure to have little impact on prices in the world’s least affordable property market.
The tax, at 200 % of a newly built unit’s rateable value, which is the estimated annual rental value of a property, will need to be approved by the city’s Legislative Council, Chief Executive Carrie Lam said.
The policy will not be applied on resold flats.
Hong Kong has one of the least affordable housing markets in the world and private home prices have been on a record-breaking run for 19 consecutive months, fuelling discontent among residents.
Under the proposed measure, developers would have to report the status of their new flats to the government annually, and the additional tax would be slapped on flats that had been left vacant for six out of the past 12 months.
Lam said the property market currently has at least 9,000 empty new flats, including some that were completed five years ago.
“Today, when the housing supply is so tight and the demands for ownership are so strong, it is hard to understand why so many flats are left empty,” she said.
Lam also said the government would modify a Pre-sale Consent Scheme so that developers would have to push out at least 20 percent of their flats during pre-sales.
“In recent years we see flats are sold in the way toothpaste is squeezed out of the tube,” Lam said. “This will be unacceptable in the future.”
The government said nine plots of land previously allocated for private homes would now be used for public housing.
A vacancy tax could be a double-edged sword for the housing market, according to property consultancy JLL.
“Developers may consider funnelling the additional costs to buyers to offset the vacancy tax, leveraging on the strong levels of demand in the market,” Ingrid Cheh, associate director of research department at JLL, said this week. ( Editing by Anne Marie Roantree & Shri Navaratnam)
CHANDIGARH: To ensure fire safety norms are complied with, the Chandigarh Municipal Corporation (MC) is all set to make no objection certificates (NOC) mandatory for residential buildings.
At present, fire NOCs are required for commercial, industrial and institutional buildings.
Taking note of the fact that residential buildings are not equipped with fire-fighting systems, the UT administration has decided to make NOC submission mandatory.
Once the move is implemented, the residents will have to apply for NOCs at the fire department for both old and new constructions and pay the prescribed fee.
Residents would be required to submit the fire protection plan indicating complete fire fighting arrangements and the means of access and escape.
According to the norms, a building must have a staircase for providing access and exit and should be equipped with fire-fighting system such as fire alarm, sprinklers, and smoke or heat detectors.
UT chief fire officer Anil Kumar Garg said NOCs would be required for residential properties on the pattern of other buildings. “It will be made mandatory for all old as well as new buildings,” he added.
Federation of Sector Welfare Associations of Chandigarh chairman Baljinder Singh Bittu welcomed the move but urged the authorities to ensure that the residents do not face harassment at the hands of the officials.
“The process should be made hassle free,” said Bittu.
The issue will be discussed in the house meeting on June 29.
The Chandigarh administration has already made NOCs manding 29, 41, 40, 44, 43, 45, 47, 38 (west), 51, 55, 56, 63 and Modern Housing Complex, with around 64,000 units of 100 different categories.
There are also 112 group housing societies in Sectors 48, 49, 50, and 51 in the city, having over 1,000 flats. datory for basements in residential buildings having area more than 200 square metre by bringing an amendment in the Chandigarh Building Rules (Urban), 2017.