BEIJING May 6 More Chinese cities are rolling
out measures to encourage home purchases, expanding efforts by
local governments to support the cooling property market as
authorities come under pressure to steady China's faltering
The eastern city of Tongling in the Anhui province has
introduced steps including providing tax subsidies to first-home
buyers, and cutting downpayment to 20 percent from 30 percent
for selective buyers, a statement on the city's government
website said on Monday.
Ningbo, the coastal city of the eastern Zhejiang province,
has also relaxed home purchase restrictions, the official China
Securities Journal newspaper reported on Tuesday, quoting a
meeting held by a local industry association.
By softening the rules, the local governments are
effectively reversing a near-five-year-old policy of reining in
China's frothy property market, underscoring policymakers'
resolve to support an economy growing at its slowest pace in
China's growth engine has lost steam in the past year,
squeezed by lacklustre demand for exports and the government's
push to cut its own investment in a bid to reshape the economy.
The moves follow recent similar measures by three other
cities -- the southern city of Nanning, the eastern city of Wuxi
and the Xiaoshan district in the eastern city of Hangzhou -- to
relax property controls by easing rules for buying homes or
China's home prices rose at double-digit rates in most
cities last year, but the market has shown signs of cooling
since late 2013 as authorities clamped down on property
speculation, and as banks made it harder for home buyers and
small developers to get loans.
A cooling property market puts more pressure on regional
economies as incomes of local governments take a hit. Analysts
expect more cities to follow suit as a recent cooling in land
prices will likely further crimp local governments revenues.
"If property activities weaken further, we think the
government may allow various local governments to relax home
purchase restrictions and cut down the current hefty
down-payment requirements," economists at UBS said in a note to
Previous figures from land ministry have shown that gains in
residential land prices slowed for the first time in nearly two
years in the first quarter, and are likely to slow further in
the second quarter.
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Shri