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BEIJING, November 11 (TMTPOST) — Acutal prices of new homes sold by property developers shall not be higher than the price declared to the government and the downward foating range shall not exceed 15% of the declared price, according to an official document released by the Dongguan municipal bureau of housing and urban-rural development on Tuesday.

Compared with the city's exisiting price limit policy, house prices are allowed to have an additional 5% downward floating.

In order to stabilize housing prices, "ceiling prices" for new homes in many cities were first introduced in September 2016. A transaction whose price exceeds the guidance price by a certain margin would not be approved. In addition, some cities also stipulated that house prices "could neither go up nor down" and home ownership transfers would be allowed to register online if the sold price falls by a margin bigger than a certain downward floating range.

The Dongguan government announced in March 2020 that the actual transaction price of new homes shall not be higher than the declared price, and shall not be lower than 90% of the declared price. At that time, new home prices in Dongguan were soaring, and regulators needed to control the rise in prices through the price limit order. The regulator also stipulated the upper and lower limits of the transaction price, which could prevent real estate enterprises from declaring inflated prices. If real estate companies wanted to lower the selling price, the wait time for the adjustment should be more than half a year, but the reduction range was not limited.

The momentum of Dongguan's rapid house price rise continued until the first half of 2021. On April 29, 2021, Dongguan issued another document reiterating "strict control over the price increase of homes for sale."

Subsequently, the real estate industry took a sharp downward turn, and the property market became increasingly depressed. In order to avoid social unrest caused by falling prices, more than 20 other cities, including Yueyang, Zhuzhou, and Guilin, issued orders to limit the fall of home prices in the second half of 2021.

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