China cracking down on rumour-mongering in property market

[SHANGHAI] China is intensifying a crackdown on property developers and others who spread rumours intended to push up prices, part of government efforts to head off a housing bubble.

China's Ministry of Housing and Urban-Rural Development on Wednesday ordered local regulators to intensify probes into rumour-mongering and "malicious" advertisements which play up rising home prices, saying it was disrupting the market, according to a statement on the ministry's website.

The ministry said local authorities should follow the example of local police in Hangzhou and Shenzhen, which have taken "restrictive measures" against a local developer and an Internet user who spread rumours or untrue information related to property prices. Such steps will ensure a "stable and healthy" home market, the ministry said.

Local authorities have taken a number of measures to calm China's property market, after new home prices surged the most in six years. The housing ministry on Oct 3 published a list of 45 real-estate developers and property agencies it said had inflated the market through illegal behaviour, including hoarding properties and spreading rumours.

Shenzhen Real Estate Broker Trade Association, which represents realtors in a city where property prices surged as much as 62 per cent in the past year, on Thursday banned them from using advertising wording that potentially helps sales, such as "gone for the day", "the cheapest" and "exclusive", it said in a statement on its website.

The association will also ban agents for as long as two years for distributing brochures that violate current rules.

The Shanghai Stock Exchange Property Index fell 0.2 per cent at the midday break, taking its decline this week to 2.1 per cent.

The Hang Seng Property Index has slumped 3.4 per cent this week, and dropped as much as 0.7 per cent in morning trading.

BLOOMBERG