China Should Stop Housing Presale to Reduce Risks, Lawmaker Says

The presale system exposes homebuyers to considerable risk and, since the developers’ capital crisis of 2021, many were left making mortgage payments on housing they can’t occupy

Introduced in 1994, the presale system allows developers to sell properties before completion

A Chinese lawmaker said the country should scrap the practice of allowing real estate developers to sell unfinished housing projects, to safeguard homebuyers and reduce risks within the property market.

Zhu Zhengfu, a delegate to the National People’s Congress (NPC) said he will propose abolishing the housing presale system at the annual gathering of the top legislative body next week.

Zhu, a partner at Hylands Law Firm in Beijing, said the presale system exposes homebuyers to considerable risk before taking possession of their properties, such as delays in delivery, poor quality of construction and false advertising of amenities.