Vanke's home-sale permits scrapped in China's Xi'an in clampdown

[SHANGHAI] A Chinese local government halted home-sales permits to China Vanke Co, as the nation's leaders escalate scrutiny of irregularities in the property market to rein in surging prices.

Xi'an city, the capital of Shaanxi province, halted applications on pre-sale permits submitted by Vanke, which is suspected of illegally selling two projects, according to a statement on the city's housing bureau. Transactions involving Vanke's 12 projects in the city were also halted, the bureau said. The bureau didn't disclose what illegal activities Vanke was engaged in.

The move is the latest evidence that Chinese local governments are stepping up a campaign to cool a home-buying frenzy and to prevent a housing bubble. China's housing ministry in October asked local administrations to investigate "illegal" property sales by home builders, in a bid to maintain an "orderly" home market.

Vanke's Hong Kong-traded shares fell as much as 3.9 per cent, the biggest intraday decline since March 29. The builder's Shenzhen-traded shares fell 1 per cent as of 1:37pm.

Separately, Vanke said Tuesday that it cancelled a 1.5 billion yuan (S$305.3 million) bond sale, citing changes in market conditions.

Representatives at Vanke's public relations department didn't immediately comment.

Xi'an's official television station reported Monday that Vanke began selling apartments in three projects before acquiring full permits. Chinese developers are required to obtain pre-sale permits before selling, as they typically sell projects under construction and book revenue at delivery.

BLOOMBERG