A Chinese city near Shanghai imposes ban on resale of cheap homes to curb speculation
- Nantong city imposes a five-year ban on resale of properties to curb market speculation amid economic slowdown
- The move follows a separate decision by housing bureau to halt home sales in an estate near Shenzhen to prevent price fixing
The eastern Chinese city of Nantong, with a population of more than 7 million, has introduced a new rule to ban near-term resale of certain cheap homes in the latest step by authorities in the country to curb property market speculation.
On Wednesday the government of Nantong, near Shanghai and a number of other port cities, said buyers who have bought new homes at prices much lower than the market average are not allowed to resell their properties for a period of five years.
China has clamped down on property speculation since 2016 to stop home prices from overheating. But with the pace of China’s economic growth slowing, policymakers are aware of the need to avoid wholesale squashing of the property market – a pillar for the broader economy.
Beijing has been calling instead for the adoption of city-based policies to ensure market stability, Reuters said. Analysts say any sharp drop in home prices would likely not be tolerated by local governments, it added.
China’s economic growth is expected to fall below the psychological level of 6 per cent next year, according to a forecast by Fitch Ratings in a report earlier this month. The rating firm also predicted no-gain in home prices in top-tier cities like Shanghai, Beijing, Guangzhou and Shenzhen over the next two years.