BEIJING, June 27 A city in northern China
re-affirmed its decision on Friday to allow people to buy more
than one home, after appearing earlier this week to have rowed
back on a move that could risk angering the central government.
Hohhot, in the Inner Mongolia region, is the first city to
openly relax housing restrictions.
Any moves that fuel demand can be controversial with home
prices already near record levels. The central government would
prefer local governments to stand firm in stamping out property
speculation as far as possible as it fears that unaffordable
property could become a cause of social unrest.
But, some regional governments, who depend on land sales
from a buoyant property market for a large chunk of their
revenues, have quietly loosened controls.
Hohhot's housing department confirmed in an online
statement, however, that restrictions on home purchases had been
removed, and people can buy more than one home, regardless of
whether they are registered as residents, popularly known as
having a hukou.
An online circular issued earlier this week appeared to
suggest that Hohhot had second thoughts about relaxing the
curbs, but it was swiftly removed.
Real estate analysts were unsurprised that Hohhot is showing
support for its property market. Based on an assumption that
developers can sell 1,000 homes a month, Hohhot has about three
years worth of unsold housing stock, according to data from a
research institute of real estate services firm E-House China
E-House data also showed new home sales in Hohhot dropped
around 17 percent in the first five months of this year compared
to a year ago, though the drop is relatively modest compared to
more drastic declines of over 50 percent elsewhere in
Given the performance of China's property market is
diverging between different cities, the housing ministry said
this month that local governments can set policies based on
their own needs, suggesting that they have some room for
But analysts expect most housing restrictions introduced
over the past five years to remain in place, particularly in
large cities where prices are the frothiest.
(Reporting By Xiaoyi Shao and Koh Gui Qing; Editing by Simon