Beijing has just put its first price-controlling apartment complex on the market in the municipal district of Daxing (大兴), selling off nearly 200 units within the space of two hours via on-site lottery sales.
On the morning of 9 June Yinghaifu (瀛海府), Beijing first price-controlled apartment development, officially entered the market, with an estimated price differential of between 10,000 and 20,000 per square metre compared to the average price for standard commercial housing in the same district.
All 194 units were purchased within two hours, with an average sales price of 52,449 yuan per square metre for an 88 square metre, western-style apartment, and a ceiling price of 55,071 yuan per square metre.
The average price for a housing unit without installations is around 63,000 in the same area, while the price for a fully fitted apartments in high-end developments such as Jinmaofu or Tianlang can rise to as high as 70,000 yuan per square metre.
The Yinghaifu residential development in the Beijing district of Daxing is one of three price-controlled housing complexes which have just recently obtained approval for sale from the municipal authorities.
The introduction of price-controlled housing have long been anticipated in Beijing, particularly given the launch of real estate market controls by municipal governments around the country since the start of 2017, as part of efforts by the central government to contain asset prices.
Analysts expect the sudden launch of price-controlled housing to rapidly emerge as a dominating force on Beijing’s market for new homes.
The sales system for Yinghaifu employed the use of a “lottery,” with a sales manager announcing five numbers at a time, and ticket holders then permitted to select their units.
Participation in the lottery required proof of assets totalling at least 2 million yuan, with around 700 potential buyers lining up for registration.
According to analysts such as Zhao Xiuchi (赵秀池), chair of the real estate faculty at the Capital University of Economics and Business, Beijing’s real estate market currently suffers from insufficient supply, while the launch of price-controlled housing will serve to further spur demand.
Data from Centaline Property indicates that the total sales area of price-controlled housing is around 4.4 million square metres, for approximately 45,000 units, which could serve to contribute significantly to filling in the supply shortfall.