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UPDATE 1-Some Chinese cities relax housing controls as downturn bites
August 28, 2014 / 12:41 PM / in 3 years

UPDATE 1-Some Chinese cities relax housing controls as downturn bites

(Updates with Hangzhou’s latest move)

BEIJING, Aug 28 (Reuters) - Hangzhou, one of the Chinese cities worst affected by an oversupply of housing and weakening property prices, will abolish all home purchase curbs from Friday, the official Xinhua news agency said, as local authorities seek to support a cooling market.

Restrictions on purchases of homes smaller than 140 sq. m. (1,507 square feet) in the city, capital of the eastern province of Zhejiang, will be lifted, the agency said. Limits on purchases of larger homes have already been scrapped.

The unwinding of property controls is a turning point in China’s housing policy, which has been steadily tightened since 2009 to contain frothy home prices.

Many analysts now believe the slowing property market is the biggest risk to the world’s second-largest economy.

In China, regional governments earn a large chunk of their revenue by selling state land.

Out of 46 such governments that introduced home-purchase restrictions, at least 32 of them have openly or quietly relaxed such curbs this year, according to data from CRIC, a unit of real estate services firm E-House China.

But others have not budged, with higher downpayment levels and limits on the number of homes that residents can buy still in place for a fifth year to temper house prices, CRIC said.

Here are the measures taken to bolster the property market.

** Below are the cities that have removed limits on the number of homes that residents and non-residents alike can buy, allowing them to own more than one home:

Hangzhou of Zhejiang province (Aug 29)

Xian of Shaanxi Province (Sept 1)

Harbin of Heilongjiang Province (Aug 16)

Kunming of Yunnan Province(Aug 11)

Zhengzhou of Henan Province (Aug 9)

Changsha of Hunan Province (Aug 6)

Taiyuan of Shanxi Province (Aug 4)

Shaoxing of Zhejiang Province (Aug 4)

Hefei of Anhui Province (Aug 2)

Jinhua of Zhejiang Province (Aug 1)

Xuzhou of Jiangsu Province (Aug 1)

Wenzhou of Zhejiang Province (July 29)

Shijiazhuang of Hebei Province (July 28)

Haikou of Hainan Province (July 23)

Jinan of Shandong Province (July 10)

Hohhot of Inner Mongolia Region (June 27)

** The following cities have relaxed home purchase restrictions with conditions:

* Foshan of Guangdong Province (Aug 7)

Individuals who are registered as residents can buy two homes and non-residents who do not own any property in the city can buy a house.

Limits on home ownership now apply to individuals, compared to previously when they were applied to households.

Before the change in rules, households could not own more than two houses while non-residents who have paid more than a year’s worth of taxes could buy no more than one property.

* Qingdao of Shandong Province (Aug. 1)

Buyers can buy homes larger than 144 square metres in downturn areas. Limits on home purchases have been scrapped in suburban areas.

* Ningbo of Zhejiang Province (July 31)

Buyers can buy existing homes or homes larger than 90 square metres in downturn areas. Restrictions on home-buying have been removed in suburban areas.

* Hangzhou of Zhejiang Province (July 29)

Buyers can buy homes larger than 140 square metres. Limits on home purchases have been scrapped in the Xiaoshan and Yuhang districts.

* Wuxi (July 26) and Suzhou of Jiangsu Province (July 19)

Buyers can acquire homes larger than 90 square metres.

* Nanning of Guangxi Province (April 29)

Residents in an economic zone near Nanning now have the right to buy homes in the city, expanding the pool of potential buyers to beyond the city’s dwellers.

** The following cities or provinces have raised the sizes of mortgage loans or have offered subsidies to banks which provide cheap mortgage loans:

* Jiangxi Province (Aug 21)

Banks are urged to cut minimum downpayment for second-home purchases.

* Fujian Province (Aug 1)

Eligible second-home buyers can enjoy the same preferential mortgage and downpayment policies as that for the first-home buyers.

Banks are urged to increase loans to developers and home buyers.

* Sichuan Province(July 1-Dec 31)

Banks that offer mortgage loans lower than, or at, the benchmark lending rates to first home buyers will get government subsidies equivalent to 3 percent of their extending mortgage loans.

* Tongling of Anhui Province (May 5)

Eligible first-home buyers will receive state subsidies equivalent to 1 percent of the value of their homes. Maximum mortgage sizes will be raised to 300,000 yuan ($48,600) from 250,000 yuan for families with only one working parent, and down payment levels for first-home buyers will be cut to 20 percent, from 30 percent.

Source: Local government websites, official media ($1=6.1768 Chinese yuan) (Reporting by Shao Xiaoyi and Koh Gui Qing; Editing by Prateek Chatterjee and Clarence Fernandez)

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