Hebei regulators curb speculative practices following announcement of new economic zone

By Li Xuanmin Source:Global Times Published: 2017/4/2 15:20:29

Regulators from a just announced special economic zone in North China's Hebei Province on Sunday suspended real estate transactions and new permanent residential permit, or hukou, registrations to curb speculative practices.

The new area, called the Xiongan New Area, located about 100 kilometers southeast of Beijing, will span three counties, including Xiongxian, Rongcheng and Anxin that sit at the center of the triangular area formed by Beijing, North China's Tianjin Municipality and Shijiazhuang, Hebei's capital, according to a statement on Saturday jointly issued by the Communist Party of China Central Committee and the State Council, China's cabinet.

The Xiongan New Area is of "national significance" like the Shenzhen Special Economic Zone, the first economic zone set up in 1980 after China launched economic reforms, and the Shanghai Pudong New Area, said the statement, describing the decision as "a strategy crucial for the next millennium."

The new area, which is not directly connected with the capital, Tianjin nor Shijiazhuang, and instead sits at the center of the triangle formed by the three cities, marks a strategic shift in China's urban construction, Cao Heping, professor of economics at Peking University told the Global Times on Sunday.

"If the Xiongan model is replicated in the Pearl River Delta and Yangtze River Delta, some districts in these areas can be separated from big cities forming a new type of urbanization, completing the final step of China's modernization," Cao said, noting that the significance of the Xiongan New Area is comparable to the birth of China's free trade zones. 

In the wake of the announcement, "all property-related transactions at the three counties were suspended on Saturday due to concerns that speculative activities would drive up local property prices," a Beijing-based real estate agent surnamed Deng told the Global Times on Sunday.

Although an increasing number of homebuyers have shown interest, "virtually no residential properties at the new area were on sale," Deng added. 

The National Business Daily (NBD) also reported on Sunday that Xiongxian authorities held an urgent meeting on Sunday morning, requiring real estate agents and developers to stop selling homes. The report quoted officials as saying that "the local government has worked overnight to close all outlets that sell homes in Xiongxian and also sent staff members to supervise developers." 

And only those who have acquired both land and sales certificates will be qualified for developing and selling apartments at Xiongxian, the report stressed. 

The average price of second-hand homes in Xiongxian has skyrocketed to over 8,000 yuan (1.165.25) per square meter from the usual price of around 3,000 to 4,000 yuan, the NBD report noted.

An Anxin resident also told the NBD that news about the setting up of a new special economic area in Hebei has been circulated in the housing market since the Spring Festival, which has led to the surge in local home prices to more than 10,000 yuan a square meter compared with 4,000 to 5,000 yuan a square meter in February.

Despite the curb, Deng said that consumers may instead opt to buy properties in areas nearby Xiongan New Area, such as Wen'an county and Bazhou in Hebei. "Home prices in Bazhou have soared to around 5,000 yuan per square meter since the beginning of March," Deng noted.

Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute, predicted that local regulators would impose home purchase limits as soon as property transactions in the new area resume. 

"For example, homebuyers without a hukou are not allowed to purchase homes there, and the down payments will be raised for residents who buy a second home," Yan told the Global Times on Sunday. 

In addition to strict housing curbs, Anxin police announced that starting March 8, the registration of new hukous has been suspended except for newborns, another NBD report said.  

Zhao Juecheng contribute to this story 

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