This city near Shanghai will cap home price rises

The ‘Venice of China’ is seeing incendiary appreciation rates

The ‘east gate’ of Suzhou. ZDL/Shutterstock

The government of Suzhou, a tier-two city close to Shanghai, will limit increases in annual new home prices this year, the South China Morning Post reported, citing a report published Monday in the state-run publication Paper.

In a meeting with developers Friday, Suzhou housing authorities proposed restricting the increases to five percent, with “fresh curbs” to be implemented in July if key gauges fail to cool, the Post noted.

For perspective, the average new home price in Suzhou stood at CNY22,160 (USD3,259) per square metre in May: a year-on-year increase of 8.45 percent, according to the consultancy CRIC.

More: Why China is dithering on a national property tax

Home to 10.7 million, the so-called ‘Venice of China’ has seen its property market heat up due to a strengthened market sentiment and low mortgage rates.

Suzhou’s proximity and improved connectivity to Shanghai — Kunshan county in Suzhou is now connected to Shanghai’s metro network — have been an impetus for immigration, noted Zhang Antao, an agent with Suzhou-based housing brokerage Deyou.

“Many buyers flocked to the market to buy a second home after news that land parcels were being auctioned at large premiums. They bought their first home three to four years ago, and have seen their values spiralling up, and wanted to repeat the success,” said Ge Wenwen, a Suzhou-based analyst with CRIC.

A manufacturing hub, Suzhou hosts many electronics and tech companies from Japan, Singapore and Taiwan.