Source: AFP
One of China’s richest cities said Thursday it will lift all restrictions on buying homes, joining a growing list of urban areas that are overturning restrictions as they try to shore up a faltering property market.
Many Chinese cities imposed restrictions and strict credit requirements on housing markets more than a decade ago in an effort to curb soaring prices and rampant speculation.
But now they are reversing those policies in an effort to stave off an economic downturn marked by a debt crisis among developers, weak demand and falling prices.
The eastern city of Hangzhou — home to 12.5 million people — said Thursday it had waived all market restrictions “to promote stable and healthy growth (of the market).
“From the date of issue … those purchasing accommodation within the boundaries of this city will no longer have their purchase qualifications reviewed,” it said.
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Hangzhou, a major innovation hub that is home to tech giants such as Alibaba, is one of the most desirable and expensive places to buy real estate in China.
The announcement quickly garnered more than 150 million views on the social networking site Weibo, where many users were skeptical that the policy would make a difference.
“With Hangzhou housing prices, what’s the point of canceling purchase restrictions? I still can’t stand it,” wrote one commenter.
Bill Bishop, the publisher of the influential newsletter Sinocism, called the move “a sign of desperation”.
“If this doesn’t make sales goosebumps, there will be a bigger problem as prices will have to be adjusted much lower,” he wrote on social networking site X.
More than 20 cities have lifted housing purchase restrictions since the start of last year, according to an AFP tally.
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Chengdu in southwest China said last month it would no longer check prospective buyers’ household registration documents, social security and other conditions before purchases.
Several of the biggest cities, including Beijing, Shanghai and Shenzhen, have partially removed curbs but have resisted ditching them entirely.
Real estate and construction account for more than a quarter of China’s gross domestic product, but the sector is under unprecedented pressure from 2020.
That year, authorities increased developers’ access to credit in an effort to reduce mounting debt.
Since then, major companies such as Evergrande and Country Garden have collapsed, while falling prices have discouraged consumers from investing in property.
Measures introduced by the central government to support the sector have so far had little effect.
And President Xi Jinping has largely stuck to his oft-touted dictum that “houses are for living in, not speculation.”
Last month, the International Monetary Fund said China’s economic recovery from the pandemic could falter if the crisis is not properly addressed.
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“Without a comprehensive response to the troubled real estate sector, growth could fall back, hurting trading partners,” it warned in its global economic outlook report.
Source: AFP