Shenzhen is continuing to strengthen efforts to cool down the real-estate market, even to the extent of reforming the school admission system, putting pressure on prices of xuequfang (properties in school districts).
Mainland media reported that at recent xuequfang auctions in Shenzhen, prices had to be greatly reduced or even set below the official second-hand reference price, before buyers bit.
There are units in Xiangmihu area with prices lower than the market price of five million yuan (HK$6 million), but no one seems to have shown any interest.
On the JD.com auction platform, a luxury xuequfang in China Travel Service (Hong Kong) Garden in the Xiangmihu area had a bidding price of 19.7 million yuan, while the price of similar units in the same area generally exceeded 25 million yuan.
Even though the price was significantly lower than the market price by more than 5 million yuan, the flat still failed to be sold at auction because of no bids.
The other unit that failed to sell is located in the Baihua district, which came with an opening price of 10.84 million yuan, or 104,000 yuan per square meter.
Although there were 4,915 visits on the auction page, no one was willing to take it at that price.
Only five people were bidding for it even after the seller dropped the price to 8.67 million yuan.
The flat was finally sold for 10.35 million yuan, a price of 98,900 yuan per square meter, which is lower than the local second-hand reference price of 100,000 yuan per square meter.
Some people in the real-estate industry pointed out that the recent auction market for xuequfang in Shenzhen is clear: if the bidding price is higher than the second-hand reference price, no one will buy the flat. The transaction can only be closed if it is lower than the reference price.
The second-hand reference price has become the bidding index of housing in the Shenzhen school district.