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China Daily Website

Govt approves many property stimulus steps

Updated: 2012-05-16 09:37
By Wu Yiyao in Shanghai ( China Daily)

China's central government has approved more than 80 percent of the housing-purchase policies that have been proposed in 33 Chinese cities since August last year, according to a report by the newspaper Securities Times.

Five cities, Wuhu, Shanghai, Foshan, Chongqing and Chengdu, have seen policies aimed at controlling housing purchases suspended or canceled after those measures were found to conflict with the central government's plans to curb increases in housing prices, the report said.

Local governments are trying to spur the property market because doing so is one of the best ways to boost economic growth, said Xue Jianxiong, analyst with China Real Estate Information Corp.

Many of the approved policies are meant to stimulate apartment sales and aim to do so through adjusting the interest rates charged on mortgage loans, lowering housing prices, changing the qualifications people must meet to buy houses and offering stipends to home buyers.

Xue said some of the policies are not likely to have great effects on local property markets, largely because the amount of money they pertain to is not large. He said many of them amount to nothing more than gestures encouraging people to buy.

Housing management authorities in Yangzhou, Jiangsu province, introduced a policy last week that will give rewards to home buyers who purchase already finished residences.

Yangzhou home buyers who purchase finished homes, commonly known as refined decorated houses, will receive cash rewards that vary in accordance with the size of the residences they buy, according to a government circular posted on the housing authorities' official website.

So far, the central government has not suspended Yangzhou's policy, which is expected to take effect on July 1.

"We aren't seeing more customers these days and, in fact, have had fewer customers than last week because buyers are waiting for July 1 for the new policy to take effect," said Gu Jia, a property saleswoman in Yangzhou's Ganjiang district.

Shanghai is seeking to tighten its controls over the property market, unlike many of its neighboring cities, which are trying to loosen theirs. The city recently introduced a policy that bans single residents with Shanghai household registrations from buying a second home, local media reported.

On Tuesday, Shanghai housing management authorities posted an announcement saying the ban has been in effect since February and that it is not new.

Local housing authorities, according to the announcement, want to reiterate that Shanghai will continue to strictly enforce the various control policies that now govern the real estate market.

Liu Haisheng, head of the housing management authorities in Shanghai, said last week that the practice of speculating in Shanghai real estate has effectively been brought to a halt and that controls over the property market will not be loosened in the near future.

Indices for the second-hand housing market in Shanghai have suggested that housing prices in the city have been declining for six months.

Liu said current housing prices in Shanghai are still "on the high side".

"My observation is that almost no clients are buying houses for purposes other than for their own housing, while in the past at least one-third of my clients bought apartments for investment or speculation," said Zhang Hailiang, a property agent in the Xinyuan Property Agency in Shanghai's Zhabei district.

"Owners of second-hand houses don't think now is a good time to cash out," Zhang said. "And now our biggest headache is that we can't find enough sellers while buyers are eager to make purchases."