China property crisis: wealthy eastern city of Changzhou is latest to lift home resale restrictions to boost market
- The move suggests even China’s wealthier cities are keen to boost their property markets to shore up economic growth
- The easing of restrictions is necessary to facilitate the ‘stable and healthy development’ of the property market, said Ni Hong, the minister of housing
The change means owners can now put their house on the market once they have obtained their Real Property Ownership Certificate, rather than having to wait two years after purchase, according to a statement by the city’s housing bureau on Tuesday.
Homeowners usually have to wait between three and six months to receive their certificate, meaning the time limit is cut by at least 18 months in most cases.
The measure came into force on February 15, the statement said.
Changzhou’s gross domestic product (GDP) per capita reached 178,243 yuan (US$25,711) in 2022, twice the average in mainland China, according to the city government’s official website.
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Restrictions on the resale of homes were among the main tools regulators had used to curb speculation in the country’s property sector in an attempt to tame skyrocketing prices in recent years.
They have been used by Chinese authorities since 2017 along with other measures such as caps on property loans, tighter home-buying restrictions to rein in the housing bubble engulfing the country.
Several dozen local governments have loosened home purchase restrictions in recent months to boost sales.
In the latest case, the government of Changsha in central Hunan province eased restrictions on resale in five districts in the city, according to a report by Chinese state-owned media outlet The Paper on Monday.
Under the revised rule, Changsha residents who bought homes in five of the seven regions with restrictions are now allowed to sell their homes four years after they bought it, whereas before, the four-year period began only after they had received their certificate of ownership.
The governments of Huizhou and Yangzhou have also relaxed restrictions on home resales within the last month.
The easing of restrictions is necessary to facilitate the “stable and healthy development” of the property market, said Ni Hong, the minister of housing and urban-rural development, during a media interview on Tuesday at the “two sessions” political meeting in Beijing.
Wang Tao, chief China economist at UBS, said in an online webinar on Tuesday that property sales across mainland China will see a slight dip compared with last year, though sales towards the end of 2023 may increase about 10 to 20 per cent compared with the same period a year earlier.
UBS’ recent decision to lift its forecast for China’s economic growth to 5.4 per cent from 4.9 per cent, is partly because of a faster-than-expected rebound in the property market, according to Wang.
