Easing restrictions at the national level, not city level, will prove effective in boosting China’s property market, say analysts
- Home sale rose marginally in only one of the three cities where property curbs were eased
- CICC and other analysts said credit easing holds the key to boosting property sales, which is not within local governments’ purview
Chinese cities that have eased property curbs have not seen a significant pickup in sales, as analysts believe these measures are not enough on their own to boost the sector given the bearish sentiment hovering over the economy.
Guangzhou, Zhuhai and Heze loosened property curbs in late Decemberafter a key economic meeting in Beijing adopted a pro-growth policy stance, while granting local governments more power to adjust policies based on their respective situations.
Data from the consultancy China Real Estate Information Corp (CRIC) showed that in Guangzhou, sales of flats targeted at investors inched up 2.6 per cent from December 24 to 30, the first week after the rules were eased, compared to the prior two weeks. In Zhuhai, new home sales dropped 17.3 per cent in December over the previous month. There were no figures available from Heze as it is a small and inconsequential market.
Whether the easing can make a difference remains to be seen as more than 60 Chinese cities have various administrative curbs, ranging from purchase eligibility restrictions, resale ban and price cap, in place.
While there is rising expectation that more cities will be allowed to relax their tight curbs following the three cities’ lead, its success could decide the fate of China’s property market this year – the biggest economic growth driver.