New | Removing housing curbs not likely in first-tier cities in 2015

Speculation the mainland will eventually remove home purchase restrictions in the four first-tier cities of Beijing, Shanghai, Shenzhen and Guangzhou have never died down. But this will not happen in 2015, some industry experts say, despite rising expectations it may soon take place.

China imposed controls on how many homes each family can buy in May 2010 as part of its efforts to rein in runaway housing inflation. Since mid-2014, such heavy-handed restrictions have gradually been phased out in all but these four cities and Sanya on the tropical island of Hainan, given an industry downturn induced by tight credit and a heavy housing glut.

New versions of how the four cities will tweak purchase restrictions reemerged recently.

“The first-tier cities need to wait for a longer while and (home purchase restrictions) will not be scrapped any time soon,” said Wang Lina, a senior researcher at the Chinese Academy of Social Sciences, a top government think tank in Beijing.

“Other policies can be relaxed (to stimulate demand),” she told the South China Morning Post, suggesting the removal of the 20 per cent income tax for families selling a small flat to immediately buy a bigger one as no capital gain will occur during the upgrade.

But a group of researchers from the same think tank published a report last month predicting that the property downturn will continue in 2015 and Chinese government will add policy support, including eliminating home purchase restrictions in all cities.

Beijing last week raised the maximum mortgage from the local housing provident fund to 1.2 million yuan (HK$1.52 million) from the previous 1.04 million yuan. Its home purchase restrictions, the most severe across the country, remained unchanged.