BEIJING (Reuters) – A handful of Chinese cities are relaxing property controls to support a cooling house market and shore up the world’s second-largest economy, which is growing at its slowest pace in 18 months.
The unwinding of property controls is a turning point in China’s housing policy, which has been tightened since 2009 to calm a frothy property market.
But after nearly five years of government efforts to restrain house prices by raising downpayment levels and limiting the number of homes that residents can buy, Chinese home prices are still at record highs.
Below are the measures that have been taken to bolster the property market.
* TONGLING CITY, ANHUI PROVINCE, MAY 5
The supply of public housing will be increased, and eligible first-home buyers will receive state subsidies equivalent to 1 percent of the value of their homes.
The requirement for getting preferential mortgage rates from the government will be relaxed. Buyers now need to contribute to a social housing fund for just three consecutive months to qualify, down from six months previously. Maximum mortgage sizes will be raised to 300,000 yuan from 250,000 yuan for single-working parent families, and downpayment levels for first-home buyers will be cut to 20 percent, from 30 percent.
Existing home owners can also buy a larger property using state loans, and those who want to buy public housing can enjoy a 50 percent discount on their borrowing rates.
The city will also make it easier for home buyers to get a hukou — China’s registration system that ties residents to a city and which affects their access to public services such as education and pension plans.
Developers will also have easier access to sales revenues locked up as reserves and managed by the government.
Source: Tongling government website
http://zwgk.tl.gov.cn/web/XxgkNewsHtml/003096562/201405/003096562-201405-00002-150771.html
* WUXI CITY, JIANGSU PROVINCE, APRIL 18
Those who buy a house in Wuxi larger than 60 square meters in size will be eligible for a Wuxi hukou, down from 70 square meters previously.
Source: Wuxi government website
http://fch.wuxi.gov.cn/xxgk/xxgkml/index.shtml?url=/BA25/B/05/6770688.shtml
* XIAOSHAN DISTRICT, ZHEJIANG PROVINCE, APRIL 28
The downpayments paid by developers when they purchase land will be capped at 10 million yuan ($1.6 million) when the land worth is over 100 million yuan. Previously, developers had to pay a downpayment worth 10 percent of the land value.
Source: Securities Times newspaper
http://www.stcn.com/2014/0428/11374992.shtml
* NANNING CITY, GUANGXI PROVINCE, APRIL 29
Residents in an economic zone near Nanning now have the right to buy homes in the city, expanding the pool of potential buyers to beyond the city’s dwellers.
Source: Xinhua news agency
http://news.xinhuanet.com/house/cc/2014-04-29/c_126444008.htm
* NINGBO, ZHEJIANG PROVINCE, MAY 6
Those who do not have a property in Ningbo can buy a house in the city. Previously, buyers had to show that they do not already own a property in their hukou city, or primary place of residence.
Source: Xinhua news agency
http://news.xinhuanet.com/fortune/2014-05/06/c_126465620.htm
($1 = 6.2455 Chinese Yuan)
(Reporting by Aileen Wang and Koh Gui Qing; Editing by Shri Navaratnam)
