Housing Frenzy in Beijing

Last week I posted one example of bubble behavior in Beijing, as people paid up to ¥1000 for a service ticket in order to avoid wait times at the property office. Transaction Tax Cut Spurs Bubble Activity in Beijing: ¥1000 For Reservation Number

Now another example emerges as sellers are throwing out high opening prices. It begins with a sale in Daxing, an outer suburb of Beijing, which saw a property sell for ¥47,000 per square meter, followed by news that Vanke had hiked prices on all its projects in Beijing; the company denied the report.

The latest news says ¥3 million yuan is now the "opening price" for homes that are not too far outside the city. Analysts are more conservative in their estimates, projecting an increase of 5% to 10% in 2016, and say these high prices may be artificial. Still, even if that is true, it reflects an attempt by sellers to cash in on the current mood which increasingly bears the hallmarks of speculative fervor. After Spring Festival, prices in the East Fourth Ring increased ¥4,000 to ¥5,000 yuan per square meter, or about 10%. The average price hike in the city is about ¥1,000 per sqm.

One property near Jinsong subway station (between Guomao and Panjiauan on the 10 line) sold for ¥1.8 million before this year, now a similar property is listed for ¥2.1 million. The transacted price will be closer to ¥1.9 million according to analysts, reflecting the ¥1,000 per sqm rise in price.

The advice for buyers is to recognize prices will rise, but not get caught up in the bubble.

iFeng: 300万元是起步价? 警惕北京楼市虚涨喊价

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