South China's Guangxi Zhuang Autonomous Region plans to pilot banning the sale of uncompleted commercial residential buildings in the capital city Nanning this year to "regulate the order of real estate market", local officials said Sunday.

The existing presale system allows developers to sell residential houses prior to the completion of construction.

The reform would make Nanning China's first city to ban the presale of commercial residential houses.

Song Jidong, a senior official of the regional housing and urban-rural development department, said specific policies are still being formulated.

China introduced presale system in 1995 amid efforts to increase homes supply to curb market speculation.

Xue Jianxiong, an analyst from E-house China, a leading real estate services company, said the ban might spark home shortages and then push up housing prices.

The ban could also increase costs for developers and they would pass on the increases to home buyers, Xue said.

The presale system has long been at the center of controversy. It often leads to disputes between property developers and home buyers as some developers change designs and planning or deliver low-quality buildings.

Gao Ge, a professor from the Guangxi University for Nationalities, welcomed the ban, saying it would help to regulate the property market. The government also needs to improve tax policies to contain market speculation, Gao added.

(Xinhua News Agency January 24, 2010)