BEIJING, June 25 A city in northern China on
Wednesday appeared to rescind a decision to lift curbs on home
purchases, highlighting the tension between central and regional
governments over winding back controls on property.
The government in Hohhot, in the Inner Mongolia region,
announced last week on its website that it would start allowing
people to buy more than one home, regardless of whether they
were registered as residents, popularly known as having a hukou.
The ceiling for bank mortgages offered at a preferential
rate was also raised to 500,000 yuan from 300,000 yuan earlier,
the notice said.
But the online circular, which was seen by Reuters and was
dated June 19, was deleted by late on Wednesday afternoon.
A call to the regional property regulator went unanswered,
and a regional government official declined to say if the
restriction on property purchases had indeed been lifted.
The about-turn underscores the conflict of interest between
China's central and local governments when it comes to tempering
the property market, where prices are still near record highs
despite a current slowdown.
Worried that record low home affordability will cause social
unrest, the central government has avoided relaxing curbs on the
property market, despite some analysts fearing that a cooling
housing market will worsen China's economic slowdown.
For local governments, which benefit from a buoyant property
market through revenues from sale of land, the housing downturn
is more painful and authorities are often eager to roll out
support measures for the sector to counter the slowdown.
But some of these attempts to boost the real estate market
have been blocked by Beijing, which hates to see home prices
sprint even higher.
For example, Beijing forced governments in areas such as
Wuhu in central China, Foshan in the south and Chengdu in the
west, to retract their plans to relax housing controls in 2012.
So far, just a handful of Chinese cities, including Wuxi in
the south, have eased property controls to support the housing
China's average home prices fell for the first time in two
years in May and price weakness spread to more major cities,
adding to downward risks to the broader economy.
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Clarence