Major Chinese Cities Rush to Scrap Home-Buying Curbs to Boost Demand
Summary
China’s eastern export hub, Wuxi, joined other major cities in dropping home-purchase restrictions to attract buyers, as a persistent housing slump continues to pressure the world’s second-largest economy.China’s eastern export hub, Wuxi, on Tuesday joined other major cities in dropping home-purchase restrictions to attract buyers, as a persistent housing slump continues to pressure the world’s second-largest economy after earlier policy-easing failed to sustain a property revival.
Wuxi, a populous port city in China’s affluent coastal Jiangsu province, said it would scrap curbs on home buying, in addition to implementing a broadened definition of first-time home buyers and cuts on mortgage rates and down-payment ratios, measures that have been announced by Chinese ministries earlier this summer.
At the start of September, the cities of Nanjing in Jiangsu province and Dalian and Shenyang in the rustbelt northeastern Liaoning province, became the first batch of big cities to lift home-buying restrictions. Since then, other municipalities have followed suit, including the cities of Foshan and Dongguan in southern Guangdong and Jinan and Qingdao in eastern Shandong.
Many of China’s smaller cities have already taken similar measures in the first half of the year, but have failed to engineer a strong property rebound. Meanwhile, China’s four first-tier cities—Beijing, Shanghai, Guangzhou and Shenzhen—have held off such actions, fearing potential speculation frenzy and an overheated housing market.
China’s authorities in recent months have rolled out a slew of policy support to aid the country’s ailing property sector, which roughly accounts for a quarter of China’s economic activity. However, recent data shows the protracted housing slump is far from over.
China’s new home starts in the first eight months of 2023 fell almost a quarter from a year earlier. The decline in property investment deepened in August, while home prices fell in 52 of China’s 70 major cities, up from 49 in July, official data showed.
Write to Singapore Editors at singaporeeditors@dowjones.com
