Nanjing may inspire cities to ease home-buying policy

More cities in China may follow Jiangsu province’s Nanjing in easing property policies to attract talent, but the move does not mean that home purchase restrictions will be relaxed nationwide, analysts said.

Nanjing, the capital city of East China’s Jiangsu province, announced on Monday that talent in the city will no longer be subjected to household registration restrictions when purchasing their first homes in the city.

This move was announced immediately after Lanzhou, in Northwest China’s Gansu province, said last Sunday it would remove property-tightening measures in some suburbs and central districts in the city.

More cities, particularly lower-tier cities that have successfully curbed speculation and have solid demand to meet, are likely to follow the two cities in relaxing some of their home-purchase restrictions.

However, it does not mean that China’s housing market curbs are going to be relaxed nationwide, and the philosophy of city-specific policymaking is going to continue in the long run, analysts said.

Tang Hua, senior director of Savills Shanghai Residential Sales, the real estate services provider, said that some second-, third- and fourth-tier cities have already ruled out speculation while solid demand is rising as migrants are moving in and industries need more talent.

“For these cities, there is no longer a need to suppress real demand. These moves are not interpreted as signals of ‘relaxing’ but as natural responses to new conditions,” she said.

Large cities such as Beijing and Shanghai are unlikely to relax current policies in case of volatility in the market occurs, she said.

Wang Menghui, minister of housing and urban-rural development, said in December 2017 that China would facilitate demands from firsthome buyers and those wishing to improve living conditions in 2018. Authorities will continue to take cityspecific measures to ensure stable and healthy growth in the real estate market, Wang said.

It is estimated that more cities are likely to relax restrictions on sales volume while maintaining a prudential stance when monitoring housing prices, said Eva Lee, real estate analyst with UBS Securities.

Developers welcome relaxations on sales volumes as they help transactions rebound, Lee said.

China’s real estate market is in a much healthier condition now than when the policies were first tightened, and can afford to experience some relaxation, Lee said.

“Of course, the relaxations in lower-tier cities are helping talent to meet housing demands. It is not the case that all restrictions are removed all at a time,” she said.