(Yicai Global) June 27 -- Authorities in Hangzhou, capital of China's southeastern Zhejiang province, have announced a policy to suspend sales of housing -- including commercial and second-hand housing -- to companies and organizations within designated restricted areas, amid allegations of cheating.

This measure makes it the third Chinese city to recently implement such policies. China's second-tier cities thus keep upping their game to check real estate speculation.

Three companies registered for only one month by the same legal entity won the home lottery simultaneously and so qualified to buy three housing units, per the lottery results Hangzhou, released June 25. The probability of 0.34 percent of this happening strongly suggests irregularities, and this has aroused great public concern. Regulators in the leafy lakeside city, the capital of China's southeastern Zhejiang province, who issued the homebuying restriction policy yesterday, also announced that they will investigate the lottery, Zhejiang News reported.

Xi'an in northwestern China's Shaanxi province became the first city to suspend sales of homes to corporations and organizations within designated restricted zones on June 24. This was intended to "prevent property speculation by enterprises," said an official in charge of the city's regulatory department. In a case still under investigation, a lottery-rigging scandal that implicated 35 government officials, seven real estate companies and operators of the independent lottery system recently rocked the city, China Central Television reported in May.

A similar policy also issued in Changsha, the capital of central Hunan province. It mandates that homes purchased within restricted areas may only be resold four years from the time of receipt of a deed of title. More cities are set to issue similar policies in the future, industry sources noted.

The purchase of homes by enterprises and public institutions counters the current policy orientation, said Yang Donglang, director of the Real Estate Research Institute of Xi'an Jiaotong University. Against the backdrop of a tightening housing supply and the push to rein in property speculation, priority should go to ensuring the purchase of homes by residents, which is the way to put the people's wellbeing first, Yang added.

Editor: Ben Armour