Shenyang city eases home buying restrictions

GMT 13:37 2014 Friday ,13 June

Arab Today, arab today Shenyang city eases home buying restrictions

Shenyang city eases home buying restrictions
Shenyang - XINHUA

Shenyang, capital of northeast China's Liaoning Province, has been making headlines after relaxing home purchase restrictions in the city.
Since Tuesday, news about scrapping restrictions has been circulating on cyber space. Although the city government denied any truth in this to Xinhua, local insiders said Shenyang loosened policies about two weeks ago.
According to real estate agents, every couple used to be allowed to buy two houses. Now, both husband and wife can buy two homes each.
The threshold for a person without a Shenyang hukou to buy a home has also been lowered. A person is now required to provide proof of tax or social insurance payments for at least three months in the city before buying a property. Previously, a potential buyer needed at least one year's tax or social insurance payments.
Hukou, or household registration system, ties access to basic local welfare and public services to one's place of residence.
Analysts said the slowing down of home sales and high housing inventory forced Shenyang to make changes.
According to E-House China R&D Institute, a research firm in Shanghai, housing inventory in Shenyang reached 18.28 million square meters by the end of May, up by 28 percent from the same period last year.
Wan Nan, general manager of the Shenyang branch of the real estate information provider CRIC, said the loosening of restrictions will have a significant effect on inventory.
Although the central government has not given a greenlight to loosening home buying limits nationwide, Shenyang and other cities have relaxed restrictions in response to the cooling property market.
According to real estate agent Centaline Property, besides Shenyang, 16 cities in eight provinces have relaxed restrictions since the second half of last year.
Nanning, capital of south China's Guangxi Zhuang Autonomous Region, announced in April that residents of five neighboring smaller cities can enjoy the same rights as Nanning dwellers to buy homes.
Previously, non-locals needed to present documents of paying local income taxes for at least one year to be able to buy a home.
Wuxi, a third-tier city in east China's Jiangsu Province, announced that migrant workers who have a stable job and buy a home bigger than 60 square meters from May 1 can get its hukou. The city earlier set a hukou threshold of purchasing a home larger than 70 square meters.
Home prices began to rise steeply from the second half of 2009, partly fueled by record bank lending. The soaring prices led to complaints from ordinary Chinese as well as fears of a housing bubble.
Since 2010, governments at all levels have taken various measures to regulate the runaway market. Many cities including Beijing, Shenzhen and Nanning set restrictions on home purchases including higher down payments and imposing caps on the number of apartments a family can buy.
Yang Hongxu, deputy head of E-House China R&D Institute, said restrictions are temporary measures to stabilize home prices.
Policies are now unnecessary as the property market is cooling down nationwide, he said.
Yang said property development plays a big role in supporting local governments' fiscal revenue and economic growth. Under current downward pressure of economic growth, local authorities still have incentives to ease home purchase restrictions.
More cities are likely to loosen their restrictions on home buying in the future, he said.
Researchers with Centaline Property said although scrapping restrictions is a big trend, the short-term effect may not be satisfying, since the current cooling down of the property market has mostly resulted from some cities' oversupply of houses and rapid growth of home prices.
Yang Hongxu said currency and mortgage policies play a more important role than purchase restrictions in terms of stimulating the property market.

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