SHANGHAI (Reuters) - Shanghai's housing authority has stepped up supervision over its property market, continuing to rein in a sector plagued by irregularities and rampant speculation.
Property prices have soared in China's biggest cities such as financial hub Shanghai and capital Beijing since last year, prompting regulators to step up control to cool the market to avoid a crash.
Shanghai's housing bureau said in a notice that a lottery system to govern new home sales would be introduced. A notary office would handle the lottery to ensure fairness when buyers outnumber available units.
Real estate analysts say the lottery system, though never put in place formally before, has been frequently employed by developers and sales agents to allocate popular new units.
A Shanghai-based employee from a large real estate firm told Reuters the process could be rather opaque as the results could be pre-determined based on connections or even bribes, but the new measures would mainly affect smaller developers.
"The rules are not entirely new, just that they are more refined and detailed. As a large developer we've made sure to do everything by the books," the person said.
Local governments have strictly capped the prices for new units, effectively deterring developers from launching new projects for sale, thus reducing the supply in the market, said the person, who declined to be identified as he is not authorized to speak to the media.
The notice also forbade real estate firms and agents from any form of property speculation, and said it would set up a blacklist for those who violate rules.
It also called for the strict implementation of a real-name purchasing system preventing buyers from purchasing property using different names, thereby circumventing ownership restrictions.
The moves followed a slew of other measures that were introduced in the city in March and October last year.
Local housing authorities expect Shanghai house prices to remain stable in 2017 as a result of these measures aimed at giving priority to genuine home buyers rather than speculators.
Reporting by Jing Wang and David Stanway; Additional Reporting by Yawen Chen in BEIJING; Editing by Jacqueline Wong