Beijing Restricts Property Sector Ads to Cool Market

Category: Rules and Regulations

The Chinese capital of Beijing has introduced new measures banning some types of property advertisements in order to cool a hot housing market, reports CNBC. The city of more than 21 million people is said to be experiencing ballooning property prices and fears an exodus of young city dwellers priced out of housing.

Feng shui, investment gains ads banned

The article reports the latest regulations ban overt advertising gimmicks promising good feng shui or high investment property returns. The rules singled out 15 property websites that city officials said were in violation, giving the portals a deadline last week to remove the ad language.

“I think the key thing to look out for in China this year is going to be the property sector, as it always is,” Seb Lewis, content director for China at S&P Global Platts, a commodities and energy sector information firm, told the news outlet. The domestic property market reportedly accounts for nearly one-fifth of China’s gross domestic product and is said to be a bellwether for other sectors. Lewis added last year’s “very good” housing prices would likely be constrained by the government regulations.

Big city valuations to spread to smaller cities

The article notes the advertising ban is just the latest such move. Earlier this year, authorities reportedly limited mortgage loans to a maximum of 25 years and increased down payment requirements for second homes. Hong Kong has also instituted new regulations at the city level to cool its market, which has reportedly seen prices increase 364 percent since 2003.

Lewis told the news outlet China might see more problems before the situation improves. “[Big cities] really only represent five to seven percent of total property,” he noted. “The smaller cities have been really strong, and I think as we go through the year the government’s going to be clamping down on that.”

Posted on: Wednesday, April 19, 2017