The influx of prime real estate onto the Chinese market has very little to do with supply and demand and everything to do with the harsh stance Beijing’s new leadership is taking against corruption. Frightened by the government’s focus on rooting out corruption within the party, officials have been rushing to sell homes linked to crooked dealings, the Telegraph reported.
The Telegraph cited a report by the Central Commission for Discipline Inspection (CDIC), China’s anti-corruption body, which points to a rapid growth in luxury home sales. According to the report, officials sold nearly 10,000 luxury homes last year in Guangzhou and Shanghai alone.
Chinese academics have raised doubts about the accuracy of some of the report’s findings. The claim that $1 trillion had been smuggled out of the country in 2012 is seen as an exaggeration; a professor at Peking University told the Telegraph a number close to 100 billion pounds ($US158 billion) was more accurate.
As fears rise in China over increased government interest in officials’ finances, there has been a sharp increase in the search for property abroad as a means to hide capital -- and escape -- if necessary. The National Association of Realtors in the United States estimates sales of more than $US9 billion worth of property to Chinese investors. Companies which help Chinese nationals find property abroad are seeing an increase in demand for property in the tax haven Cayman Islands.
Xi Jinping, General Secretary of the Communist Party, has made stamping out corruption a main focus of his early tenure. The BBC reported on Jinping’s transitional speech to the Communist Party in November, in which he warned that corruption could “kill the party and ruin the country.”
Jinping promised a policy of “no leniency” for party officials on Tuesday, according to Asia One News. "No exception will be made when it comes to party disciplines and law," Xi said. "Cases will be investigated completely and no leniency will be meted out no matter who is involved."