China stymies ‘experiments’ aimed at whipping up housing market frenzy in many cities facing budget squeeze

Name: Promised ‘park views’, homebuyers in China get a plastic lake
Uploaded: 2020-05-27T04:00:13.000Z
Duration: 51 s
Description: Promised ‘park views’, homebuyers in China get a plastic lake

Wuwei city in Anhui province pulls policies aimed at boosting sales, mirroring reversals in 11 other cities since February

More local governments will continue test the water to shore up fiscal revenue and economic growth: analyst

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A labourer walks past residential and office buildings under construction in Hefei, Anhui province in April 2014. Many city governments are easing policies to spur the local property market only to be told by Beijing to undo them. Photo: Reuters

Iris Ouyang

Published: 12:00pm, 27 May 2020Updated: 12:00pm, 27 May 2020

Homebuyers in China are facing more policy flip-flops, as Beijing frowns on attempts by local governments in at least a dozen cities to whip up a property market frenzy, bolster land sales and jump-start growth.

Wuwei, a city of about 1 million people in the eastern Anhui province, issued new policies on May 20, including allowing owners to resell their properties without complying with a minimum two-year holding period.

The measures were aimed at energising a “healthy development of the construction and real estate sectors to tackle the coronavirus pandemic” and bolster its fiscal budget. By May 23, they had been taken down from the local government website.

“Local governments continue to test the water for fast recovery of the property market under high fiscal pressure,” said Zhang Bo, chief analyst at 58 Anjuke Real Estate Research Institute, a Shanghai-based property research firm. “The central government does not want to see such short-term” spurious measures to ensure stable prices, he added.

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Promised ‘park views’, homebuyers in China get a plastic lake

Prices of land for residential use in 100 major cities jumped 12.3 per cent in the first four months from a year earlier, according to E-house China Research and Development Institute. Sales on acreage basis have almost doubled during the period, despite more than a month of industry shutdown due to the pandemic.

The case in Wuwei mirrors other swift about-turns – some within 24 hours – in at least 11 cities across the country since late February, according to analysts and media reports compiled by the South China Morning Post. They included Guangzhou, tier-2 city Jinan and many smaller cities, such as Zhumadian in the central Henan province and Jingzhou in Hubei province.