8 Chinese cities introduce lottery system for sales of new residential projects
Photo: 52rkl.cn
Eight cities in China have introduced a lottery system for sales of new residential projects as demand is exceeding supply, according to media reports. And experts expect the system to be extended to other cities across the country.
"The lottery system is an offshoot of local governments' price-cap policy," said Zhang Dawei, chief analyst at real estate agent Centaline Property. "Property developers are now banned from setting prices for new houses, in order to cool the country's hot property market."
"It leaves many people snapping up properties by a lottery system," he added.
Despite strict curbs, property sales are still booming, leading cities including Chengdu and Nanjing to start a lottery-like registry system for home buyers to restrict property purchases.
The policy seems to have guaranteed transparent and fair distribution of units and become an effective measure to curb speculation in the housing market.
However, insiders expressed concerns over it, saying the move could cause anxiety among young people by creating an illusion that they might not be able to buy new houses amid the buying frenzy.
They also pointed out that a practice of "black box operation" could emerge if relevant supporting policies are not put in place.
"To increase the chances of winning the lottery, the whole family would try every means to increase their participation. "They will treat buying new houses as an investment."
Since late last year, dozens of local governments have passed or expanded restrictions on house purchases and increased the minimum down payment required for a mortgage.
Recent policy moves indicate the government will not loosen its stance on curbing property speculation, and that will limit the possibility of price hikes.

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