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Fine-tuned moves to shore up realty sector

Policy revisions in top cities to inspire similar actions in next-level markets

By WANG YING in Shanghai | China Daily | Updated: 2024-02-08 10:36

Potential homebuyers look at property models in Huaian, Jiangsu province. [Photo by Chen Liang/For China Daily]

Optimized homebuying measures introduced recently in cities including Beijing, Shanghai and Guangzhou, and white lists of property projects to better meet the reasonable financing requirements of developers, will promote the stable and healthy development of the real estate market, industry experts said.

The fine-tuned home purchasing policies are expected to boost market activity after the Chinese Lunar New Year, with some cities possibly seeing a mild sales pickup in spring, said Guo Xinyu, an analyst with the China Index Academy.

The policy revisions in top-tier cities Guangzhou, Shanghai and Beijing may inspire similar actions in first — and key second-tier cities, Guo said.

Regardless of specific adjustments to home purchases, a number of Chinese cities are responding positively to the Ministry of Housing and Urban-Rural Development's call for active measures, granting more macro-level rights to local governments in their home markets, analysts said.

For example, Guangzhou's eased residential property purchase measures announced on Jan 27 led to the scrapping of buying restrictions on residential flats of more than 120 square meters.

Li Yujia, chief researcher at the Guangdong Planning Institute's residential policy research center, said the downtrend in home prices and weak homebuying expectations prompted Guangzhou to take the initiative among the four top-tier cities in loosening home purchase restrictions even in downtown areas.

Guangzhou experienced the largest decline among the four first-tier cities in both new and pre-owned home prices in December, with home prices falling since the end of 2021, Li said.

Following in Guangzhou's footsteps, Suzhou in Jiangsu province abandoned its previous curbs on residential property purchases from Jan 30 regardless of the size, units, and the condition of the property, whether new or preowned.

The new home supply volume of Suzhou's downtown area saw a 1.36 percent year-on-year dip to 5.15 million sq m, while transaction volume shrank by 20.57 percent year-on-year during the same period, said Jin Ke, a senior analyst at the Suzhou branch of the China Index Academy.

"With the lifting of purchase limits in the city, it is hoped that it will effectively shore up demand and attract more nonlocal talent to settle down in the city," Jin said.

On Jan 30, Shanghai revised its homebuying requirements by allowing eligible nonlocal individuals who have paid taxes for five years or more, to buy one residential apartment each outside the city's downtown area.

The move, which took effect from Jan 31, also revoked the ban on unmarried nonlocal people from buying properties in Shanghai, boosting the prospects of its comparatively large single population, said Guan Rongxue, a senior analyst with Zhuge Real Estate Data Research Center.

The policy will not only unleash homebuying demand among qualified people, but also boost market sentiment. In addition, it will also raise Shanghai's appeal among employees, strike a balance between working and living in suburban areas, and promote the integration of industries with local development, Guan said.

Beijing on Tuesday issued its version of optimized measures by loosening homebuying requirements in Tongzhou district.

This is in accordance with the current property market condition of the district, said Li.

On the one hand, it allows local people and families with no property to buy one in Tongzhou district, and on the other, the new measure strictly adheres to the principle of letting people working in the district buy a home there, Li said.

Compared to previous measures, the latest policies have been more inclusive in easing home purchase restrictions, creating an extremely viable environment for the property market, said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institution.

While home demand has got a fillip from eliminating purchase restrictions, financing for property projects has received more support after the first batch of white lists was unveiled, said analysts.

The Ministry of Housing and Urban-Rural Development and the National Financial Regulatory Administration said on Sunday that a coordinated mechanism of urban property financing was established in 170 cities nationwide by the end of January, and the first batch of white lists comprising 3,218 real estate projects had been sent to commercial banks.

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