2015-01-16

Shenzhen Govt Lockes Up Properties For Violations and Court Orders; 16,800 Homes Locked; Govt Responds

SCMP: Shenzhen slaps sales ban on two more property developers
The Shenzhen city government has blocked sales of two more developers, sparking fear more property firms will come under scrutiny, following the woes of troubled Kaisa Group Holdings.

Project sales by Rongchao Real Estate, a major commercial property developer in the city, and Dong Dao Real Estate were banned yesterday, while the transactions of four flats at Hua Xiang Garden, built by Fantasia Holdings Group, were stopped.

"Shenzhen has become the most-targeted region by the anti-graft campaign and Kaisa's recent default was triggered partly by the blockage of pre-sales," said Edison Bian, the head of China property research at UOB Kay Hian.

Bloomberg: China Overseas Land Plunges After Sale of Homes Is Blocked
China Overseas Land & Investment Ltd. (688) led property stocks lower in Hong Kong after authorities in the southern city of Shenzhen blocked unit sales by the company and other developers.

China Overseas Land tumbled as much 7 percent, the most since March 4, 2013, and traded down 3.8 percent at HK$24.30 as of 1:17 p.m. local time. Fantasia Holdings Group Co. fell 3.7 percent, while Guangzhou R&F dropped 4 percent. The benchmark Hang Seng Index slid 0.8 percent.

More than 2,800 apartments developed by China Overseas Land, along with homes by other homebuilders including China Merchants Property Development Co. (000024) in Shenzhen, would not be allowed for sale, the local land bureau said on its website, without citing a reason. China Overseas Land said all the blocked units have been sold and the move won’t affect its business or finances, according to a company statement.

Mingtiandi: CHINA PROPERTY CRISIS SPREADS AS GOVERNMENT MOVES AGAINST 5 MORE DEVELOPERS
With today’s revelations about China Overseas, we are now aware of government-imposed sales freezes at five property developers in Shenzhen, with similar moves by the authorities now appearing in other major cities.

Following the freeze of sales at four Kaisa projects during December, which later triggered the developer’s default on overseas loans and bond payments, we have now learned of moves by the Shenzhen government to shut down sales at projects by four more developers in the southern Chinese city, including China Merchants, Rongchao Real Estate, and Fantasia Holdings.

In addition to the crisis in Shenzhen, media reports today indicated that Kaisa now has had its sales frozen in Hanghzou, and another Guangdong developer, Glorious Property Holdings, has had two projects frozen in Shanghai.

Chinese coverage from iFeng: 深圳1.68万套房源被锁 涉及多个央企保障房项目

The Shenzhen government put out a statement citing four reasons for locked properties. 深圳规土委会回应为何锁房源:存四种情况

1. Illegal actions involving planning or land
2. Responding to court orders to seize assets
3. Advance sale management
4. Other typical land planning issues

Pause estate planning information systems belonging to one of the land and real estate market regulatory measures. Article 39 of the "Shenzhen Special Economic Zone Planning Land Supervision Regulations", the decision involves planning, land violations of real estate, the competent authority may impose restrictions of their property rights. "Shenzhen real estate market regulatory approach" Article 62 provides that the competent authorities in the supervision and inspection found that the process of real estate development companies, brokerage and valuation institution and its employees in violation of laws, rules and regulations of this approach behavior, you can pause it use of information systems.

In addition, to assist judicial seizure, housing type housing management and other routine business for land planning process, in order to protect the legitimate rights and interests of buyers and standardize the market order and the development of enterprise sales practices, the competent authorities may also be temporarily locked-related listings until the matter is completed and then unlock the handle.

To sum up, locked or restricted property listings may exist over a variety of reasons, it is recommended not to read too much, in order to maintain a good market environment.

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