Beijing authorities have placed a new restriction on property websites, banning them to overtly promote real estate investments, to suppress ballooning property prices.
As it has been pointed out, the property market accounts for approximately one-fifth of China’s gross domestic product. As such, it is often used as an indicator of growth or decline for other sectors, such as construction. Commenting on this recent move by the government, S&P Global Platts content director Seb Lewis stated:
“I think the key thing to look out for in China this year is going to be the property sector, as it always is. Last year was really strong, very good strong house prices, and I think we’re going to see those house prices contained by the government via policy responses, which is going to generally constrain growth, especially in the commodities sector.”
Basically, the new regulations prohibit property portals to promise investment returns and benefits of feng shui just to attract real estate investments. These are the latest in a set of restrictions that are aimed at clamping down surging property prices that risk negatively affecting the country’s economy.
Industry reports state that there are already more than ten property portals penalized by the Chinese government after being caught breaking the current real estate advertisement restrictions. These sites have been given a deadline to remove overtly promotional languages in their advertisements.
According to the government, this latest move is essential in curbing fear of a housing bubble to occur and in preventing young people from feeling priced out when buying property, particularly in the country’s large cities.