Sunday, September 20, 2020

China’s Lanzhou city eases curbs on property

Four months after imposing tightening measures, Lanzhou eases property tightening measures

In a bid to halt housing speculation, Lanzhou, the capital city of China’s northwestern Gansu province, has eased property tightening measures. This move by the city’s government has triggered speculation that more cities may follow suit. More than a hundred cities in China have rolled out tightening curbs in a bid to halt housing speculation. The Lanzhou government had imposed tightening measures in suburb areas just four months back. However, the local government did not explain the reasons behind its latest move, but analysts cite high inventories to be the likely reason behind such a step by the Lanzhou government.

Earlier, there has been a nation-wide clampdown on housing speculation, raising concerns of further inflation of price bubbles in the sector. Lanzhou lifted property tightening measures in the suburbs while relaxing some restrictions on home purchases in downtown areas, said a notice on the city’s housing authority’s website. Although, China’s real estate market has given the country’s economy a major boost in recent years, there have been fears of a bubble.

Yan Yuejin, an analyst with Shanghai-based E-house China R&D Institute, said the suburbs had been under pressure as inventories remained high in face of rigid government curbs.

According to analysts, the move my Lanzhou’s government may be followed by other second-tier cities where property destocking has not made much progress and these cities may also lift curbs.

Zhang Dawei, an analyst with Hong-Kong based property agency Centaline said that Lanzhou’s move signals the market that there is room for some overly-strict tightening measures to be adjusted.

Lanzhou also relaxed housing purchase restrictions in its downtown districts. Now, there will not be any requirement for social security statement and tax records, the housing authority said. These new rules will be effective on January 8, 2017.

Earlier in December, China’s housing minister had hinted that China would facilitate property sales by first-time home buyers and those wanting to improve their living conditions in 2018, while stressing that destocking would continue in smaller Chinese cities where inventories remain high.

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