Local authorities are finding ways to soften the blow of China’s tight real estate policies without incurring Beijing’s wrath
- Until recently, only non-residents who had lived in the city and paid into the social security fund for two years were allowed to buy a home in Wuhan
- Chinese developers have been on edge ever since Beijing stepped up its scrutiny of highly-leveraged builders with the central bank’s three red lines of loan caps
More Chinese cities have watered down tougher cooling measures in a bid to shore up faltering property market sentiment, but analysts say the wind-back efforts are small and in line with the central government’s mantra that “housing is for living, not for speculation”.
The local government in Wuhan, capital of Hubei Province in central China, said last week that the senior management of companies headquartered in the city are now free to buy homes regardless of whether they are residents or non-residents – a status that is defined by China’s household registration system, or hukou.
Until recently, only non-residents who had lived in the city and paid into the social security fund for two years were allowed to buy a home in Wuhan. Local residents are allowed to buy two flats.
“It is a pretty clear loosening of policy, making sure the tone on the property sector is not too harsh,” said Yan Yuejin, director at Shanghai-based E-house China R&D Institute. “However, Wuhan did not implement it as a stand-alone property policy targeting everyone. The change was embedded in an announcement to encourage the wider economy, so as not to be too eye-catching.”
Wuhan’s policy fine-tuning is in contrast to events in Shenyang, capital city of northeastern Liaoning province. State-backed media outlet Cailianshe reported on October 10 that the city’s housing authority had summoned developers and told them it would fully loosen curbs.