(Yicai) Nov. 17 -- Shenzhen has not lifted the price ceiling on newly built residential properties, a source told Yicai yesterday, refuting speculation in the media that arose after a notice about a land sale in the hi-tech hub that was released the same day omitted to mention a price cap.

Price caps and the sale of land use rights are governed by two different government bodies and are not necessarily connected, the person said. Price ceilings on residential housing fall under the housing construction authority and land use rights are the remit of the natural resources planning regulator.

The land sale notice also explicitly requested those who intend to bid to consult with the local housing and construction bureau on the permitted sales price of apartments built on the land, he added. He did not comment on whether the notice means that price restrictions on apartments in the city will now only apply to certain projects.

Most notices about land sales will include the price cap on residential properties built on the land as Shenzhen has been curbing the price of new apartments since 2016 to prevent runaway prices. But amid a downturn in the real estate sector, industry players are now discussing the lifting of such restrictions.

Price restrictions distort government statistics, impacting authorities' judgement of real market conditions and affecting the precision of policy decisions, said Deng Haozhi, a member of council of China Real Estate Managers Union. 

One Shenzhen property developer has no plans to bid for land use rights as there is a glut of new apartments on the market, a staff member said, adding that the firm is still trying to sell its existing projects.

Some 2,654 newly built apartments changed hands in Shenzhen last month and 4,189 units came on the market, according to data from realtor Leyoujia’s research center. There are almost five million square meters of apartment floor area available in the city that will likely take one and a half years to shift.

Editors: Dou Shicong, Kim Taylor