Ho­hhot ends curbs on home pur­chases

More cities may fol­low suit as govt con­sid­ers mar­ket-based ap­proach

China Daily (Latin America Weekly) - - Business - By HUYUANYUAN

Ho­hhot, the cap­i­tal of the In­ner Mon­go­lia au­ton­o­mous re­gion, has ended all re­stric­tions on home pur­chases, the first city in China to take such a sweep­ing step. There will be no fur­ther lim­its on how many homes each res­i­dent may own, and those who don’t have of­fi­cial res­i­dence (hukou) in the city may also buy apart­ments, ac­cord­ing to a state­ment posted on the lo­cal hous­ing author­ity’s web­site. Those cur­rently seek­ing homes are also cov­ered by the pol­icy change, the state­ment said.

Since 2011, more than 40 cities have im­posed re­stric­tions on home own­er­ship by lim­it­ing the num­ber of units each house­hold­may­ow­nand/ or by ban­ning pur­chases by non-lo­cal res­i­dents. Other cities have re­laxed their re­stric­tions, but none have to­tally elim­i­nated them.

As the cen­tral govern­ment aims to take a more mar­ket­based ap­proach to the property sec­tor, most cities will end home pur­chase re­stric­tions sooner or later, ac­cord­ing to Liu Chunyan, gen­eral man­ager of World Union Property Con­sult­ing Co (North China).

JiangWeixin, for­mer min­is­ter of hous­ing and ur­ban-ru­ral de­vel­op­ment, said ear­lier this year that the min­istry will em­pha­size “dif­fer­en­ti­ated con­trol”. When striv­ing to in­crease the res­i­den­tial land sup­ply in cities that are fac­ing great up­ward price pres­sure—

We be­lieve more cities will fol­low suit as land in­come re­mains the big­gest fi­nan­cial source for lo­cal gov­ern­ments. And that isn’t likely to change in the short term.” LIU CHUNYAN GEN­ERAL MAN­AGER OF WORLD UNION PROPERTY CON­SULT­ING CO (NORTH CHINA)

a ref­er­ence to first-tier cities such as Bei­jing and Shang­hai — it will also give lo­cal gov­ern­ments a big­ger role in their real es­tate poli­cies, based on lo­cal con­di­tions.

“We be­lieve more cities will fol­low suit as land in­come re­mains the big­gest source of fi­nance for lo­cal gov­ern­ments. And that isn’t likely to change in the short term,” said Liu.

“This round of mar­ket cor­rec­tion is mainly trig­gered by credit tight­en­ing. If mort­gage and credit poli­cies re­main the same, the mar­ket can hardly make a strong re­cov­ery,” said Grant Ji, se­nior di­rec­tor of the in­vest­ment depart­ment at Sav­ills Plc in Bei­jing.

Cities that have eased or ended re­stric­tions are those where hous­ing sup­ply has sub­stan­tially ex­ceeded de­mand.

Ho­hhot’s hous­ing stock is close to 120,000 units, while monthly trans­ac­tions are run­ning at about 1,000, ac­cord­ing to data from Centaline Group.

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