Future home sales policies in spotlight after eastern city announces easing measures

Photo: The New York Times

The eastern Chinese city of Heze on Tuesday announced that it would lift restrictions on selling homes, the first to do so, sparking heated discussion over whether other cities will follow suit, according to China's influential financial magazine Caixin.

The move aims to promote healthy and stable development of the local real estate market, Caixin cited the announcement as saying.

Last year, the local government rolled out a policy that locals can only resell their homes after two years and non-locals after three years, in an effort to curb the hot property market, Caixin reported.

"Sales restrictions are widely seen as having succeeded in clearing out speculative investments in the industry," said Zhang Dawei, chief analyst at the Centaline Property Research Center. "Over 90 cities in the country have implemented similar rules for home sales."

Zhang also said, "Heze is the first city to pull back the rules. Once they are canceled, it will exert a huge impact on the market."

Industry insiders forecast that more property deregulation might be coming soon.

According to Caixin, several cities like Guangzhou and Zhuhai in South China's Guangdong Province are considering relaxing restrictions on home sales.

"At the two latest meetings of the Politburo in October and December, China's top leaders didn't mention property market policies," an executive of a leading real estate agency told Caixin. "Perhaps the central government is satisfied with the result of the property control."

"At least we may not see more rules in the industry in the near future," he added.

"It is possible that the central government is seeking to delegate property regulation power to local governments," said Deng Zhihao, a Guangzhou-based real estate expert. "But the authorities now tend to lift bans on home sales."

Property easing measures are generally considered as a likely tool for policymakers to help reenergize the slowing Chinese economy, particularly amid recent signs of weakening growth in the housing market.

"Currently real estate agencies are under heavy financial burden, forcing the local government to relax rules for more housing sales," said Zhang Hong, an expert at Caixin.

"Surging housing prices have limited Chinese people's consumption and further impeded China's economic development," added Zhang.

Despite the cooling outlook, regulators have shown little sign of loosening their grip on the market.

State-run Xinhua News Agency in October said that"speculative buyers should not hold any illusion that regulations will be relaxed due to the downward pressure on the economy."

According to Caixin, the provincial urban-rural housing construction department of Shandong was not notified before Heze released the policy, and it has been looking into the matter.

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