Major Chinese Cities Ease Home-Buying Restrictions to Stimulate Property Market
In a move to rejuvenate the struggling real estate industry, two prominent Chinese cities have lifted all restrictions on purchasing homes, indicating a concerted effort by local authorities to rejuvenate the housing market and drive economic growth in the second-largest global economy.
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In a move to boost the real estate sector and stimulate economic growth, two major cities in China have lifted all restrictions on home-buying.
Hangzhou, a city with a population of 12.5 million, is known for being the home of tech giant Alibaba and EV maker Geely. Recently, the city has been making changes to its property market regulations. In early 2022, restrictions were eased, with most districts seeing curbs removed last October and further restrictions on second home purchases relaxed in March.
Taking another step towards a more open market, Hangzhou will be implementing new changes starting from May 9. The city announced that potential buyers will no longer be required to have specific qualifications such as social security records or "hukou" household registration status. This move was outlined in a statement released by the Hangzhou Housing Security and Real Estate Administration on Thursday.
Under China's hukou system, every citizen must have a single registered residence, which affects their eligibility for welfare and public services.
Xi'an, a city in the northwest with a population of 13 million, made a similar announcement on Thursday.
Other cities have also taken major steps to make the process of buying property easier.
This photo taken on July 12, 2021 shows an apartment block with balconies covered with plants at a residential community in Chengdu in China's southwestern Sichuan province.
In Chengdu, a city in China's southwestern Sichuan province, there is a residential community where an apartment block stands tall. The balconies of this building are adorned with lush green plants, creating a beautiful sight.
This charming scene was captured in a photo taken on July 12, 2021. The image showcases the harmony between urban living and nature, as residents in this community have incorporated plants into their living spaces.
The photo, taken by STR/AFP/AFP via Getty Images, highlights the beauty and tranquility that can be found in the midst of a bustling city like Chengdu. It serves as a reminder of the importance of bringing nature into our everyday lives, even in the midst of urban landscapes.
Chengdu, a city with 21.4 million residents, recently made a big announcement. Starting from April 29, there will be no more restrictions on buying homes. This means that people no longer need to meet certain requirements, like having a certain household registration status or making social security payments. They can also buy as many homes as they want.
Similarly, Changsha, the capital city of Hunan province, has also removed restrictions on home purchases since last month.
China's property market has been facing challenges since 2020, when the government took action to control developers' excessive borrowing and high debt. This crackdown resulted in the collapse of Evergrande, the country's second largest homebuilder. As a result, several other major developers have also gone bankrupt, leaving millions of apartments unfinished.
The crisis has become a significant burden on the economy, prompting Beijing to take urgent measures to address the situation. This has caused widespread protests by homebuyers across the country.
But despite the stimulus measures implemented, such as reducing mortgage rates and easing home purchase restrictions, the real estate sector has not seen much improvement. Demand continues to be low.
A man walks past a No Entry traffic sign near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021.
A man walks past a No Entry traffic sign near the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021.
Aly Song/Reuters
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The Politburo, a top decision-making body of China’s Communist Party, recently announced plans to address the housing crisis by considering new measures, such as implementing “city-specific” policies to decrease housing inventory.
However, a UBS survey released on Wednesday revealed that Chinese citizens still have lukewarm intentions when it comes to purchasing homes.
According to a recent survey, 23% of respondents are considering buying a house in the next two years, which has remained the same since March 2023. On the other hand, a record high of 47% of respondents have no plans to purchase a home at all.
When asked about what factors would boost their confidence in buying a home, respondents pointed to income growth and policy measures such as rate cuts and government subsidies as the most important influencers.
According to the survey, job promotion and salary increase are still seen as the main factors that could increase confidence for individuals with low sentiment.
Analysts predict that the government may intervene to support the sector by potentially enabling local authorities to purchase vacant properties for a bailout.
The April Politburo meeting showed greater support for the property sector, with a focus on reducing the current supply of homes.
This could mean that more local governments might be permitted to buy homes directly from the market to use for social housing.
Xiaofei Xu contributed to reporting.
Editor's P/S:
The article highlights the efforts of two major Chinese cities, Hangzhou and Xi'an, to boost their real estate sectors. The easing of restrictions on home-buying in these cities is aimed at stimulating economic growth. However, the article also acknowledges the challenges facing China's property market, including low demand and the ongoing crisis caused by the collapse of major developers.
It is important to note that the article focuses on the lifting of restrictions in two specific cities. While this may be a positive step for these cities, it does not necessarily reflect the overall trend in China's real estate market. The article also mentions the lukewarm intentions of Chinese citizens when it comes to purchasing homes, as well as the need for additional measures to address the housing crisis. It is crucial to monitor the broader market and consider the perspectives of all stakeholders to gain a comprehensive understanding of the situation in China's real estate sector.
