Tomson Riviera, the most expensive apartment complex in
Shanghai, is up against a crusade. But it is a crusade that is
unlikely to help slow rising property prices, as authorities
expect. It may, in fact, violate the principles of a market
economy.
The Shanghai Housing, Land and Resource Administration Bureau
recently announced a probe into several luxury property projects,
including Tomson Riviera, on the east bank of the Huangpu
River.
Tomson Riviera, which sells for an average of 110,000 yuan per
square meter, is suspected of falsely reporting sales and hoarding
apartments to speculate on higher prices. But Tomson Group, the
property developer, has denied any illegal activity.
The high-rise apartment buildings have been a target since they
hit the market in October 2005. Just three apartments, worth 284
million yuan, have been sold so far.
Tomson Riviera went on sale at a time when the government
launched a campaign to cool down the red-hot property market. That
campaign has been ineffective, and the market has continued to
climb - just last month, 70 major Chinese cities reported an
average housing price increase of 6.4 percent.
The administration is still investigating whether Tomson
Riviera's developer did anything illegal, but it continues to be
used as a scapegoat for the price hikes.
What the government should be concerned about are the
out-of-control prices of residential projects for ordinary home
buyers.
Projects like Tomson Riviera are aimed at the super rich. They
are few and their steep prices are not what's driving average home
buyers crazy.
It is just like an Armani suit with a price tag of 60,000 yuan.
More than 99 percent of the population would think it's
outrageous.
(China Daily June 22, 2007)