Here’s an interesting accusation: Ren Zhiqiang, the chairman of Huayuan Real Estate, says the reason that Beijing property prices are falling, on average, is that the government has suspended sale permits for luxury properties.
Without the sale permits, there are no luxury properties hitting the market, so the average price appears to be falling.
"CCTV reported a piece of good news this morning, saying Beijing’s house prices have fallen by 8,000 yuan ($1,171) per square meter," Ren wrote on his blog earlier this week. "It appears then that new policies are making significant progress. But what they don’t know is that Beijing has suspended the issuing of sale permits for high-end properties. Without them, the average price obviously will fall."
The accusation of government manipulation was denied by the Beijing authorities, who simply said that if properties did not meet an appropriate standard, they would not be given a sale permit. "The government is certain to deny it, but I say it is a fact: many high-end properties have failed to receive sales permits recently," Ren told the China Daily.
Ren, in case we forget, is perhaps the most hated property magnate in China. He has been repeatedly outspoken, saying that luxury housing is supposed to be unaffordable for poor people and saying that migrants who cannot afford houses should return to the countryside.
His brash manner saw one audience member lob at shoe at him last week, to which he replied that he was happy to be getting presidential treatment.
He is a plain talker, and the accusation has the ring of truth about it. So perhaps it is too early to call the popping of the Chinese property bubble, despite what the government would like us to think.