China Escalates Crackdown on Property Speculation in 30 Cities

(Bloomberg) -- China escalated a crackdown on property speculation, saying it is embarking on a six-month campaign in 30 cities to root out violations in the housing market.

The special campaign will target unlicensed real estate agencies, developers’ violations and false advertising, according to a statement Thursday from the housing ministry. Cities including Beijing and Shanghai will be involved in the six-month operation starting early July, according to the statement, which said that officials will focus on rent manipulation, postponement of sales by developers to fetch higher prices and non-compliant loans to fund down-payments.

Regulators’ multi-year campaign to cool home prices in China gathered steam this week, with officials ratcheting up pressure on the sector on multiple fronts. The nation’s policy banks tightened approvals on new lending for shanty-town redevelopment projects. China is looking to plug a loophole in companies’ offshore bond sales by banning short-dated dollar note issuance, people familiar with the matter said Thursday.

The National Development and Reform Commission also said Chinese developers should use proceeds from overseas bond sales to repay debt instead of investing in domestic property projects and replenishing working capital.

China’s home prices rose by the most in 19 months in May even as the government pressed ahead with curbs to cool housing demand. New-home prices in 70 cities tracked by the government gained 0.8 percent from a month earlier, according to Bloomberg calculations based on data from the National Bureau of Statistics released earlier this month. That compared with a 0.57 percent increase in April.

The housing ministry said Thursday it will regularly expose violations to “shake the market.”

To contact Bloomberg News staff for this story: Emma Dong in Shanghai at edong10@bloomberg.net

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Paul Panckhurst

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