September 23, 2018 / 9:38 AM / a month ago

China's Hubei busts illegal house builders, agents amid property market clear-up

SHANGHAI (Reuters) - China’s central Hubei province has busted 25 real estate companies and property agents for illegal pre-sales, fake marketing and dodgy deals amid a clear-up of “chaos” in the housing market, the official Xinhua news agency said on Sunday.

The province’s housing department listed the offending firms, which included state-owned house builders and intermediaries, for “severely disrupting market order, and creating a negative influence on society”.

China is looking to clean up its sizzling property market that has boomed since early 2016, trying to rein in buying frenzies in big cities even as they have spilled over to less-regulated smaller urban centers.

Hubei authorities are currently driving a six-month property market clear-up campaign, focused on cutting down speculative behavior in the market, illegal property development and shady property agents.

Six Chinese provinces have been told to rethink a property pre-sale system that enabled developers to secure funds before project completion, Reuters reported this week. Scrapping the system would be a signal of Beijing’s intent to tighten developer financing amid a crackdown on risk.

New home prices accelerated in August at the fastest pace in nearly two years, a sign that Beijing’s efforts to boost a slowing economy may once again be heating up frothy real estate markets.

Reporting by Adam Jourdan; Editing by Muralikumar Anantharaman

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