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Interface News reporter | Yang Bingke

With the deep adjustment of the real estate market, some real estate projects have "cut prices" to rush ahead, but they have been complained by former homebuyers. Now, with the withdrawal of the "price limit" policy in various places, the complaints of homebuyers have no effect.

Recently, the Wanhe Optics Valley project in Wuhan Optics Valley reduced its price by nearly 10,000 yuan, from the registered price of about 23,000 yuan/square meter to 12,500 yuan/square meter. The sharp price reduction triggered complaints from homebuyers. Subsequently, the Wuhan Housing and Urban Renewal Bureau stated that the price of commercial housing is determined by the enterprise according to market conditions, and the sales plan needs to be registered with the relevant departments. The sales price does not exceed the registered price.

In other words, complaints from homebuyers will no longer trigger supervision by relevant departments on developers, and homebuyers must bear the responsibility for price reductions on their homes alone.

Like Wuhan, Guangzhou also conveyed the information of the cancellation of price limits in complaints about specific projects.

In response to the message "I bought Huangge Poly Bay for more than 20,000 yuan in 2022, and now the property is reduced to 13,300 yuan. I ask my leader to let the company return the difference to me", Nansha District of Guangzhou stated that "according to relevant regulations, developers can enjoy the right to independent pricing based on market realities, and apply for price filing or adjustment with the housing and construction department."

Compared with Wuhan and other cities’ public response that “commercial housing prices are determined independently by enterprises based on market conditions”, Zhengzhou directly issued a document to “cancel price limits”.

On July 31, 2024, the Zhengzhou Housing Security and Real Estate Management Bureau issued the "Notice on Canceling the Guidance on Commercial Housing Sales Prices". After research by the municipal government, the housing security department will no longer provide guidance on the sales prices of newly built commercial housing. Developers will sell at their own prices and go through the procedures for pre-sale (sales) permits (filing) for commercial housing.

Prior to this, on June 22, the city of Lanzhou issued a document to "cancel restrictions on home purchase qualifications, cancel the restriction on housing listings and transactions, and cancel the filing of prices for newly built commercial housing."

Some cities still have reservations about "price limits".

Zhonghai Yuzhong Yunjin Community sold more than 500 unsold new houses in the community in the form of "workers' housing" at a price that was nearly 40% lower than the online registered price, which caused complaints from owners. The Chongqing Real Estate Transaction Affairs Center proposed "requiring the company to conduct self-inspection and rectification, standardize sales behavior, and actively communicate and explain to the early home buyers."

The Changping District Housing and Urban-Rural Development Committee of Beijing also responded to owners' complaints about price cuts, saying, "If the developer promises that the price of this apartment will not be reduced, citizens can provide relevant evidence. If our committee verifies that the project has violated regulations, our committee will take corrective measures against the company in accordance with relevant regulations. If citizens have objections or believe that the developer has committed other infringements, it is recommended that they can also protect their legitimate rights and interests through legal channels."

According to Ding Zuyu's Comments on the Property Market, "price limits" and "purchase limits", "loan limits" and "sales limits" policies have always been very powerful means for local governments to regulate the real estate market, especially in the past when the real estate market was hot, which can effectively curb the overheating of the market. In the downturn of the market, "price limits" can also effectively curb the rapid decline in housing prices. For example, in 2021, some real estate companies in Hunan, Jiangsu, Hebei and other places were interviewed for price cuts.

According to incomplete statistics, at least 11 cities have canceled or relaxed price limits since 2024, such as Shenyang, Ningde, Yangjiang, Dali, Zhuhai, Wuhu, Huainan, etc.

Judging from the results, the market has been hot and cold after the "price limit" was relaxed, and further differentiation has occurred. Take Chengdu as an example. After the price limit was lifted, improvement projects were beneficial. But in Hefei, the transaction volume in Hefei fell back slightly after the new policy, and the average price continued to rise. But this year, the new home market in Hefei has accelerated its cooling.

According to Zhang Dawei, chief analyst of Centaline Property, if the price limit policy is cancelled, the market is more likely to fall. Under the current market conditions, even if there is no price limit, no developer will sell houses at high prices because they simply cannot sell them. At the same time, price limits are a helpless move for macroeconomic regulation. If there are no price limits, the fluctuation range of housing prices will be significantly greater than it is now. Whether it is rising or falling, it is likely to be very exaggerated. Cancelling the price limit is likely to cause a cliff-like drop in housing prices in some areas, leading to irrational adjustments in the entire market.

Zhang Bo, director of the 58 Anjuke Research Institute, believes that after the price limit is abolished, the price of commercial housing will be more determined by market supply and demand. In other words, in areas where the market supply exceeds demand, if real estate developers want to speed up the pace of project sales, they must make some adjustments to housing prices. Real estate developers can flexibly adjust prices based on market conditions and their own operating conditions.

"Ding Zuyu Comments on the Property Market" believes that the restrictive policies introduced when the market was hot are no longer applicable to the current market environment. The current supply and demand relationship in my country's real estate market has undergone major changes. In the future, most cities that have not yet lifted restrictions will gradually follow suit. Core first-tier cities such as Beijing and Shanghai also have a certain amount of room for relaxation.