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Many real estate developers have asked to be included in the government housing coupon system, even though this means their property will be sold at a lower price. "The price offered by the government is relatively low, but still, most of the owners of the 80-odd real estate projects now on our platform came to us first, as they know the government platform is the only way for them to sell their inventories. Or they will lose more," Geng Tao, an official at Dongsheng's housing and land exchange certificate management center, told thepaper.cn.
The government also hopes the housing ticket system can help relieve the many problems that have emerged in Erdos' housing market in the past decade, including an explosion in private loans and stalled housing projects.
There are a lot of unfinished housing projects in Dongsheng, many of which started during the housing boom in 2009 and 2010. Among the 33,900 unsold apartments in Dongsheng, over 20,000 are uncompleted due to a lack of funding. The housing ticket system allows part of the government's renovation funding to go into the pockets of real estate developers, who can use the money to pay back their loans and finish their stalled projects.
"[The housing ticket system] is able to improve the city's image by removing these stalled constructions, and solve the problem that many real estate developers are not able to deliver the housing they had promised," Geng said.
Li Chun, CEO of Inner Mongolia's Zhengyuan Real Estate Company, thinks the system is a good idea. "The housing tickets are like a locally circulated coupon and certificate. Real estate companies can use them to return loans," he told thepaper.cn.
Li currently has three unfinished real estate projects in Erdos, all of which have been stalled for four years. He also hopes his projects can be included in the government platform. "We will earn no profits with the price that the government offers us. But it's good enough to get rid of the stocks," he said.
The coupon system has already significantly contributed to local sales of housing. According to data from Erdos' housing administration, from January to September this year, 23,124 apartments in Erdos, with a total area of 2.73 million square meters, have been sold, a 131.91 percent rise on last year. The average price of the sold apartments was 3,842 yuan per square meter, dipping 1.79 percent from the same time last year.
But Deng Yongcheng, an associate professor specializing in the real estate market at the Shanghai University of Finance and Economics, warns that the securitization of houses may lead to new problems if the government doesn't properly supervise the process. "This doesn't sound like a good idea. The coupons are like securities, and yet the government doesn't seem to have designed regulations necessary for the issuance of securities," he told the Global Times.
The coupons can be split, transferred or sold, according to the Dongsheng government's official social media account. And the owners of housing tickets are allowed to freely transfer their tickets, without paying the taxes that usually accompanies housing transactions. "This is designed to encourage residents to transfer the coupons that they don't need to people with housing needs," Geng said.
But the circulability of these coupons have also given rise to agents and speculators who buy the coupons up at a relatively lower price, and sell them at a higher price. Because housing coupons have limits in terms of the housing projects they can be used on, owners of coupons usually try to sell them at a lower price.
Wang Rui, a real estate agent, has invested 1.8 million yuan in buying cheap housing coupons from buyers, according to DragonTV. "Even though the price of housing coupons are dropping, the government won't allow it to drop too low because then people won't agree to be relocated," he told the news channel.