May 18, 2018 / 9:06 AM / 2 years ago

Chinese city of Taiyuan unveils fresh property curbs, joins six others

BEIJING (Reuters) - The Chinese city of Taiyuan in the coal-producing northern province of Shanxi tightened property controls on Friday, joining a slew of lower-tier cities that have rolled out fresh tightening measures in May, state media reported on Friday.

Local residents are now only allowed to buy two properties at most, according to Xinhua.

Buyers cannot resell their properties within the first two years of purchase, the Taiyuan government was quoted as saying.

Last week, China’s housing ministry told governments in 12 cities to rein in their fast-rising property prices and step up regulations, stressing that policies to control prices and prevent speculative investment will not be changed or loosened.

Taiyuan, a city of over 4 million people, as well as six other cities such as Chengdu and Xian, were among the cities summoned by the housing ministry.

Taiyuan’s new home prices rose 7.7 percent from a year earlier in April, official data showed.

On Tuesday, the southwestern metropolis of Chengdu introduced a lottery system for home buyers amid prevalent property speculation in the city as loose residency curbs attracted a large influx of property buyers.

Previous property restrictions are porous and speculative buyers have entered the market after they had obtained local residency, Xinhua quoted Chengdu’s housing bureau as saying. New rules now require home buyers to pay their social securities for at least a year.

China’s property prices are expected to cool steadily this year amid persistent curbs on buyers and tighter monetary conditions, but the market remains frothy and is subject to volatility, a government think tank said on Monday.

Economists polled by Reuters in late March predicted nationwide home prices would rise just 1 percent this year, after a gain of 5.3 percent in 2017.

But new home prices in China’s 70 major cities rose 0.5 percent in April from the previous month, up from a 0.4 percent rise in March, Reuters calculated from National Bureau of Statistics (NBS) data published on Wednesday.

On an annual basis, home prices increased 4.7 percent in April, slowing from a 4.9 percent gain in March.

Reporting by Stella Qiu and Yawen Chen and Ryan Woo; Editing by Kim Coghill

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