A handful of six-square-meter apartments allegedly sold for 880,000 yuan (131,963 U.S. dollars) each in Shenzhen City, Guangdong Province.
The city’s Urban Planning, Land and Resources Commission said Monday that the apartments were illegally built and sold.
Local media reported that nine six-square-meter apartments in Nanshan District had sold out the morning of being listed, on Sept. 24, and the average price was 150,000 yuan per square meter.
The apartments feature a folding bed inside a closet. The kitchen and toilet occupy another six square meters, which is allegedly a free gift from the developer.
The news quickly went viral on the Internet, with many people saying the sales were a result of skyrocketing home prices in first-tier cities.
According to an investigation launched Sunday, 11 micro-apartments, located in a 15-storey mixed-use high rise, were put on the market.
The commission said the developer had built the apartments in the pool area without planning permission. Meanwhile, four real estate agent firms, implicated in the sale and promotion of the properties, had used “deceptive marketing techniques.”
The commission confirmed that only four apartments were sold, instead of the nine initially reported.
Nanshan District Land Planning Supervision Bureau ordered Zhongzhi, a capital investment company and owner of the apartments, to restore the apartment complex to its original state. The company was also asked to launch an internal audit.
Zhongzhi said it would void the contracts and return all the money to the buyers.
An investigation has been launched and necessary measures will be adopted to regulate the companies, the commission said.
According to national standards for residential buildings that came into effect in 2012, the usable space of a residential apartment should be no less than 22 square meters.
However, the code does not apply to the micro-apartments in Shenzhen as they were built in 2004.
Easy credit and low mortgage rates have contributed to home-price increase in China’s big cities over the past year.
Statistics show that home prices in Shanghai, Shenzhen and Beijing rose 37.8 percent, 37.3 percent and 25.8 percent year on year, respectively, in August.