Property developers are facing a potentially huge dent in their sales in Beijing after the municipal government declared war on residential apartments being sold on land intended for commercial use. The Beijing authorities on March 26 banned all sales of new apartments built on plots that were originally acquired as commercial or office land. The converted commercial projects had become increasingly popular as the dwindling supply of new residential land made them a more affordable option, particularly among young buyers. Until now, the so-called “commercial apartments” also had the advantage of not being subject to home purchase restrictions, meaning non-local household registration holders could buy as many units as they liked. Under tough new restrictions, only people with a Beijing hukou – and non-hukou holders who have paid social security for five consecutive years and do not already own a home – can now buy existing units. New commercial apartments cannot be sold to individuals at all. Additionally, banks are now banned from extending loans for the purchase of such apartments, which means buyers will have use their own cash. “The policy has literally reduced such product’s transactional value to zero, as it has become very illiquid,” said Yan Yuejin, Research Director at the E-house China R&D Institute. Authorities also ordered all property agents to pull the commercial apartments off their shelves, making it much harder for owners to sell their properties. Some 38 estate agency branches in Beijing, some owned by big names such as Homelink, 5i5j and Centaline, have been shut down for violating the rule, and a further 91 have closed voluntarily. The government identified six commercial projects that were being marketed for residential purposes. All of those properties were barred from being sold, a move that affects China Vanke, Longfor Properties and China Evergrande, the South China Morning Post reports. Across Beijing, in the three days after the ban was introduced just seven commercial apartments were sold, according to Centaline, down from 850 in the three days preceding it. There are about 250,000 existing commercial apartments in Beijing, and another 150,000 units of potential supply, according to Centaline data. More than 90% were sold to individuals, and the remainder to corporations. By 2015, sales of such apartments made up 29% of total new home sales.