Chinese cities exercise caution in relaxing house purchase restrictions
Published: May 22, 2022 03:19 PM Updated: May 22, 2022 03:17 PM
Potential homebuyers look at a property model in Huai'an, Jiangsu province.Photo:Xinhua
Potential homebuyers look at a property model in Huai'an, Jiangsu province.Photo:Xinhua

The Wuhan Economic and Technological Development Zone in Central China’s Hubei Province has deleted a post on social platform Sina Weibo stating that the zone has completely removed restrictions on home purchases, one week after the country’s central bank lowered interest rate on mortgages for first-time homebuyers.

On Sunday, the zone’s housing administration posted on Sina Weibo that three areas in the zone will not restrict house purchases from Sunday, in order to support the reasonable demand of homebuyers and promote the stable and healthy development of the real estate market.

The post, which suggested that all house purchase restrictions were removed, was deleted later, with a representative from the administration stating on Sunday afternoon that the message was published by the zone without permission.

In addition to Wuhan, Nanjing in East China’s Jiangsu Province has also suspended its policy on removing purchase restrictions on purchase of second homes. 

“The relaxation of restrictions on house purchases may cause a new round of speculation, thus local governments halted the policies to stabilize market expectations,” Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

Yan noted that the deleted post did not mean that the policy had been changed, but that local authorities may adjust the content and wording, and will roll out an improved house purchase policy in the future.

On Sunday afternoon, the Hubei Provincial People's Government announced via its account on Douyin that four suburban areas of the Wuhan city had removed home purchase restrictions.

Boosted by the positive signals released by the central government, some cities have relaxed the purchase restrictions. 

For example, Dalian in Northeast China's Liaoning Province announced on Friday that the purchase of second-hand homes was no longer restricted by the total number of existing houses. High-level talent can purchase houses in the restricted areas according to their family needs, and are not limited by the number of housing units.

In addition, a total of 20 cities, including Guangzhou, Shenzhen and Tianjin have reduced their mortgage rates to as low as 4.4 percent as of Thursday.

More than 10 cities have implemented preferential housing policies to encourage families with two or three children to buy more homes. For instance, Wuhan announced on Sunday that households with two or three children, who own two houses, can purchase a new home.

The policies will further promote the healthy development of the real estate market, but the principle that “houses are for living in, not for speculation” won’t change, Yan noted.

Global Times