Owning dozens of houses is no longer something to brag about for Chinese government officials

Soon it may not be all smiles.
Soon it may not be all smiles.
Image: Reuters
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Chinese President Xi Jinping’s anti-corruption campaign has had its fair share of economic consequences. A ban imposed on lavish military banquets, for example, hurt the nation’s hospitality sector. Now, the Chinese premier appears to have his eyes set on investigating the real estate assets of Chinese government officials, which has been having an effect already in the real estate market.

According to the Wall Street Journal, which interviewed roughly a dozen property agents in China, government officials are offloading their luxury apartments en masse, often at the first bid they receive. (Presumably it was lost on none of them that the tabloid-worthy details about Wu Zhizhong, a disgraced former senior civil servant from Inner Mongolia, included a report that he owned 34 properties in China and overseas and could fill a handbag with all of his door keys.)

It’s difficult to say how much this latest crackdown will damage the nation’s already rickety housing sector, which in June reported its worst month since December 2008. Housing sales this year through July fell 10.5% from the first seven months of 2013, according to data released last week by China’s National Bureau of Statistics last week. The slowdown has frightened Chinese real estate developers.

Some officials may focus on selling their domestic real estate assets, while continuing to invest in homes abroad—New York has been a coveted destination—but that might not protect them from government scrutiny. If history is any measure, Xi is likely to go as far as he deems necessary to get the political establishment to behave the way he sees fit.