Experiment in Xiongan: a revolution in the Chinese real property market

chiny24.com 1 year ago

In fresh years, the Chinese real property marketplace has been experiencing a crisis. The main origin of this crisis is excessive speculation and abuse of developers. The pre-sale strategy in China has been in place for many years.

Causes or system

The pre-sale strategy of apartments is that the developer sells apartments even before they are built. The buyers pay an advance in this case and the remainder of the price pays after completion of construction.

This strategy has many flaws. Firstly, there is simply a advanced hazard for buyers. If the developer does not build the flat according to the agreement, the buyer may have problem recovering the money.

Secondly, the pre-sales strategy promotes speculation. The developer can sale more apartments than he can build, and buyers can buy apartments for resale with profit. This leads to an overpriced housing and marketplace disturbance.

Troubleshooting

To address the problems of the Chinese real property market, the Chinese government decided to introduce fresh solutions. 1 of them is to decision distant from the housing pre-sale system.

Pilot initiative

In Xiongan, a city built “from nothing”, from scratch (such as Nowa Huta, for example), located 130 kilometres from Beijing, Hebei Province, local authorities decided to carry out a pilot programme to sale finished apartments. This programme began in 2023 and will last for another 3 years.

Under the scheme, the buyer of the flat must receive the keys to it as shortly as the full amount, as determined in the contract as its value, has been paid. This solution eliminates many defects in the pre-sales system. The buyer can see the flat before the acquisition and besides be certain that he will receive it within the specified time limit.

Activities of another cities

Similarly, the authorities of another Chinese cities specified as Hangzhou, Fuzhou and Shanghai want to operate. They besides plan to ban or limit the scope of pre-sale of housing.

Conclusion

The decision to introduce fresh solutions to the Chinese real property marketplace is groundbreaking. The fresh solutions aim to stabilise the marketplace and increase housing availability for people with lower incomes.

Additional information

Xiongan fresh region is simply a fresh city to relieve the overcrowded capital of China, Beijing. Xiongan is located in Hebei Province, about 130 kilometres southwest of Beijing. Construction of the Xiongan fresh territory began in 2017, and the first phase of construction will end in 2035.

Xiongan fresh region is to be a technologically advanced city. It will include many technology companies, investigation institutes and world-class infrastructure. Many central offices and government agencies are planned to be transferred here. All due to the fact that Beijing “suffocates” from the excess inhabitants, as well as all those who come to the capital all day to deal with countless different matters.