Guangzhou further eases housing restrictions, sets stage for more mainland China cities to loosen curbs

The mainland Chinese city of Guangzhou, one of the country’s largest, further eased housing restrictions on Monday, five days after it scrapped a ban on sales of apartments to individuals.

The city authorities said in a document that Guangzhou residents who had paid towards a housing provident fund policy could withdraw money for buying homes for living in nearby cities such as Foshan and Dongguan.

Guangzhou becomes latest mainland China city to ease curbs on apartment sales

Such a fund is meant to help middle and low-income residents buy homes. Employers and employees are required to make a deposit in an account every month, and when an employee buys a home they can withdraw cash from the account and apply for a low-rate loan. Most contributors, including those in Guangzhou, could only withdraw cash when they bought homes locally, before the policy change.

“The change is a nod to the fact that more people working in Guangzhou, who cannot afford homes in the city, have to buy homes in nearby smaller cities,” said Yan Yuejin, research director at E-House China R&D Institute. “In effect, it will be a bonus for the property markets in nearby cities.”

The easing of the housing provident fund policy comes after the Central Economic Work Conference, an annual gathering of China’s senior policymakers that sets out the government’s economic direction for the following year, which was held last week.

The conference adopted a pro-growth tone by announcing a more accommodative monetary policy and a proactive fiscal policy, which includes more tax cuts, to support flagging economic growth. A statement released after the gathering omitted previous mentions of a “crackdown” on home price increases, and granted local governments the power to make their own property market policies based on their respective situations.