How Xian is tackling the conundrum of soaring property prices in China’s second-tier cities

Xian, the ancient Chinese capital home to the world famous Terracotta Warriors, has tightened its property purchase controls four times in nine months as it struggles to rein in skyrocketing prices.

The latest was on September 13, when the north western city, home to 8.8 million people, joined six provincial capitals across China to tighten cooling measures. Xian residents are not allowed to buy a third home and non-locals are restricted from buying a second home.

New homes are forbidden to be resold within five years, as stipulated by restrictions announced in June.

However, Su Yifei, a sales manager with a suburban residential project from developer Yanggo City, has not seen much of an impact yet. “[Our] project is not in the area subject to property transaction controls, but is in a hotspot sub-market,” he said, referring to the Xi’xian New Zone on the city’s western outskirts that promises to be a new growth engine for the city.

Yanggo City’s decorated 100 square metre flats target people who cannot buy more homes in central Xian due to the purchasing restrictions, who fear they will miss the ongoing property price boom if they don’t invest. The homes now are selling at 9,500 yuan per square metre, compared to no more than 5,000 yuan per sq m a year ago, according to Su.