Stepped-up regulation over real estate market in some cities.
On March 17, Beijing upgraded its regulation policies for the real estate market. Buyers of a second home, according to the new policies, are defined as those who have a record of residential property ownership, or have a record of a mortgage. The down-payment requirement for buyers of a second home is raised too.
On March 17 night, Guangzhou city, Guangdong province and Zhengzhou city, Henan province strengthened their restrictions over house purchasing and house loans too. Shijiazhuang city, Hebei province announced its restrictions over house purchasing and house loans.
On March 18, Changsha city, Hunan province tightened restrictions over house purchasing.
On March 19, Baoding city, Hebei province suspended sales of commercial houses in main urban area to local residents owning three or more houses in the area.
On March 21, cities like Dongguan, Langfang, Jurong and Jiaxing all rolled out regulation policies.
On March 22 night, Beijing Local Taxation Bureau issued a circular to modify the conditions for the payment of individual income tax which affects the qualification for non-local households to buy houses.
On March 23, Cangzhou city, Hebei province rolled out new policies to raise the down payment of second home purchased through housing provident fund loans to 60 percent. Some banks in Nanjing canceled the 10 percent interest rate discount of house loans provided to first-home buyers. Chengdu city, Sichuan province expanded the restriction scope of house purchasing.
Marked by the upgraded regulation in Beijing on March 17, a new round of obstruction and interception against speculative buying of residential houses was initiated. The scope was expanded from hot cities to some third-tier and fourth-tier cities.
The journalist on March 23 learnt from some Beijing-based real estate agencies that the further tightened regulation and decreased credit discount in Beijing cooled the previously hot market down. There are nearly “few visitors” the real estate agencies now.
But industry insiders believed that conclusion can hardly be drawn on the situation in just a few days. Time is needed to see the real effects of the upgraded regulation.
13 cities tighten regulation over real estate market in just 7 days
“Previously hot market cools down suddenly”, Mr. Zhang from a Beijing-based real estate agency told the journalist. The journalist also clearly felt that workers there were down in spirits. While in the weeks just after the Spring Festival, this agency was frequently visited by people every day.
A new round of regulation over real estate market rapidly swept various places recently. In just 7 days started from March 17, 13 cities, covering first-tier, second-tier, third-tier and fourth-tier cities, stepped up their regulation policies for real estate market.
The journalist finds through rough statistics that over 37 cities across the country have rolled out more than 112 regulation measures for the real estate market from Sept. 20, 2016 to now.
Data provided by the National Bureau of Statistics (NBS) shows that prices of second-hand houses in 70 major cities in China nearly all rose in February 2017. The price and volume of second-hand houses being traded in Beijing from end February to middle March both climbed, and this is the root cause behind the new round of whirlwind regulation.
“This round of regulation aims at rapidly decreasing speculative buying of residential houses and stabilizing market expectation.” Chen Sheng, executive head of China Real Estate Data Academy, said that the state must ensure steady and healthy development of the real estate market, curb real estate bubbles, and facilitate safe and stable development of macro economy and finance.
More cities to follow up
“We can find from the relationship between previous rounds of regulation policies and the trend of housing price that housing price hike can be effectively curbed after restriction policies over house purchasing and loans are stepped up”, as commented by the research team led by Yue Jiadong in GF Securities.
Multiple experts interviewed by the journalist all believed that in contrast with previous round of regulation, this round of regulation is larger in scope and stricter in measures. The real estate market might run stably under strict control.
Ni Pengfei, an expert from the Chinese Academy of Social Sciences, said that “under powerful policies, house purchasing demand seeing no urgency and limited payment ability will be delayed. Trading volume of the real estate market will largely decrease, and over-quick rise of housing price will be obviously curbed”.
Of note, this round of whirlwind regulation is more pertinent. The journalist noticed that by now, 12 cities surrounding Beijing and Tianjin, including Baoding, Shijiazhuang, Chongli, Laishui, Zhuozhou, Langfang, Sanhe, Gu’an, Dachang, Yongqing, Xianghe and Huailai, have launched measures to restrict house purchasing. In the meantime, Jiashan county and urban area of Jiaxing city surrounding Shanghai also announced measures to restrict house purchasing and house loans.
The research team led by Yue Jiadong in GF Securities analyzed that housing price trend in major cities since October 2016 shows that further regulation is possible in second-tier cities like Chongqing, Fuzhou, Tianjin, Jinan and Wuhan, and third-tier and fourth-tier cities in Beijing-Tianjin-Hebei region, Yangtze River Delta and Pearl River Delta.
Yan Yuejin, research director at the E-house China R&D Institute, also believed that “for second-tier and third-tier cities faced with huge potential pressure on housing price and large population, it is quite likely that they will proactively launch regulation measures later”.
Unexpected new policies launched on March 17 disrupted the pace of house developers. House market in Beijing will see an adjustment of house supply in late March and April. The redefinition of second house by the new policies forces house developers to sort out effective customer source again, according to Guo Yi, marketing director of real estate consultancy Yahao.
Translated by Jennifer Lu
Latest comments