Authorities ease price limits on luxury homes

Beijing Municipality was reported to have moderately relaxed its home price restrictions on luxury apartments so as to ensure home supplies, a move analysts said Sunday will further push up prices of high-end homes.

The home price restrictions were previously aimed at preventing developers from selling homes at too much high level.

The housing authorities will "moderately relax" home price restrictions on luxury apartments, the Beijing News reported Sunday, quoting sources from the Beijing Municipal Commission of Housing and Urban-Rural Development.

To prevent prices from rising to an uncontrollable level, the Beijing housing authorities placed limits on home prices in March 2013, requiring that the prices of new homes do not exceed the prices of the existing homes of the same category located nearby.

Due to the price restrictions, the luxury homes with prices of over 40,000 yuan ($6,440) per square meter could not receive sales permits from the authorities, media reports said.

An industry expert said the home price restrictions have already been relaxed since the beginning of this year.

Some high-end apartments with prices of over 60,000 yuan per square meter entered the property market recently, sending the prices of luxury homes soaring, Dong Yue, manager of research and consultancy at Savills Property Service (Beijing), told the Global Times on Sunday.

The average sales price for luxury apartments grew by 19.5 percent year-on-year in the second quarter, hitting 66,160 yuan per square meter, according to a report released by Savills in July.

A luxury apartment project developed by China Vanke Co located inside the Second Ring Road in the northern part of Beijing started sales in the second quarter with sales prices ranging between 100,000 yuan and 150,000 yuan per square -meter, according to Savills.

The housing authorities will also adjust the upper limit for the prices of ordinary homes "at an appropriate time," the newspaper said.

Only homebuyers who bought the ordinary homes at prices lower than the upper limit could enjoy tax reductions or exemptions, according to the price control measures released in 2011.

Dong of Savills said adjusting the upper limits will have limited impact on the sales volume and prices for the ordinary homes, because the home purchase limits still have not been withdrawn.