Real estate developers will no longer be able to sell homes before they are built in South China’s Hainan province, as the local government seeks to curb property speculation and keep prices stable on the island, reported Caixin.
Putting an end to the longstanding practice, the Hainan government announced at a press conference Saturday, aims to make it harder for developers to get away with certain bad practices, including delays in handing over keys to buyers and disappearing after collecting payments, said Huo Juran, head of the provincial housing department.
The change also aims to “better serve the establishment of the Hainan free-trade zone,” which is set to open by the end of this year, according to the local government.
The changes could deal a blow to the already flagging housing market amid the coronavirus outbreak. “Without access to funds during construction, developers may have to suspend a majority of the projects currently under construction, or delay delivery,” said Deng Haozhi, a property expert.