Beijing has taken action against malpractice by housing agencies to rein in skyrocketing housing prices in school districts, as part of efforts to curb speculation in the city’s property market.
Regulators with several departments, including the Beijing Municipal Commission of Housing and Urban-Rural Development and the Office of the Central Leading Group for Cyberspace Affairs, have partnered for the initiative.
Fifteen housing agencies including Lianjia, 5i5j and Fang have been asked not to even mention “school district properties,” a phrase that has become totally taboo on their websites as well as in their outlets.
Some outlets of the housing agencies have reportedly been shut down because they have dealt in high-priced school district properties and have been suspected of price rigging and creating misleading expectations by rumor mongering.
The moves seem to have been effective, since housing prices began to go down in the neighborhood of Financial Street of Xicheng District, which is one of the best school districts in Beijing.
Property sales have also dropped in many outlets, some even by 80 percent. There were 426 new commodity houses dealt in Beijing last week, 25.5 percent down compared to the week before. Meanwhile, the trading volume of second-hand houses fell by 70.3 percent.
“Houses are built to be inhabited, not for speculation,” and China has pledged to curb speculation in the property market this year, according to an official statement released after the Central Economic Work Conference at the end of last year.
School district in Wudaokou, Beijing /CFP Photo
Why the bubble?
Beijing’s property market in popular school districts has picked up due to the education fever amid Chinese parents as well as the government policy on school enrollment.
The Beijing government has required public schools to enroll pupils by the districts they live in. Pupils in districts where high-quality schools are situated can get access to good education.
Chinese parents have long put a lot of value in their children’s education and see education as the way to bring success to their children’s life.
Many middle-class families have invested millions in expensive houses in good school districts so as to make sure their children go to high-quality schools.
Housing agencies have used the fame of school district houses to attract buyers who have been willing to pay incredibly high prices for properties with connection to quality education.
Housing prices in good school districts have thus been shooting up, and there have been worries that the school districts bubble would spread to the whole property market in Beijing.
In order to dampen speculative investment on school district properties, the Beijing municipal education commission has been considering designating multiple schools for every residential district, according to a statement released in late February.
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