Wave Of Luxury Home Sales Began Last November And Has Accelerated Since December
As Beijing continues its much-publicized crackdown on government corruption and exorbitant spending, thousands of Party officials have reportedly gone on a months-long selling spree to divest themselves of high-end properties purchased in recent years. According to The Telegraph, a recent report by the Central Commission for Discipline Inspection (CDIC) — the CPC’s anti-corruption unit — noted that “a wave of luxury home sales began last November and has accelerated since December.” As such, an increasing number of luxury properties have hit the market in cities such as Beijing, Shanghai, and Guangzhou for anyone able to pay in cash.
Fu Zongmo, an estate agent in Sanya, Hainan, told the Telegraph that his colleagues had recently sold two houses on behalf of government officials. He added, “They never register the houses in their own names and they use a string of agents to do the deals.” He said one company had bribed an official by buying him a property at the Mountain Water International Complex:
The property was put in the name of the official’s relative. After six months, it was sold for two million yuan (£200,000), around the same amount it cost. Then the official could cash out. The officials often use a special mobile number and when the deal closes they invite us for dinner to end the relationship. Then they throw away the number so we cannot contact them.
In its recent report, the CDIC said that 1,100 government officials had fled China during last October’s national holidays and that 714 had been successful in getting away. The CDIC report continued by suggesting that nearly 10,000 luxury homes had been sold by government officials in Guangzhou and Shanghai last year alone, and claimed that US$1 trillion had been smuggled out of China illegally in 2012. While economists and experts have largely taken these figures with a grain of salt, the fact that many officials are trying to wash their hands clean of their properties, for various reasons, remains. As a regulation, the government has been implementing housing registration systems to curb the number of properties officials are willing to buy.
However, regulations alone are not foolproof methods of stopping official spending. As Jing Daily previously pointed out, officials will likely continue to spend regardless of domestic regulations, finding alternative ways to sustain lavish spending under the radar. Whether that spending happens to be within China, in Hong Kong or Macau, or in Europe or North America, it’s just a matter of time and strategy.