Easing of restrictions on apartment purchases has little effect

Loosening of home purchase rules in several Chinese cities has had a limited impact on the fortunes of the real estate sector, as the measures have failed to ensure sustained growth in property sales, amid record oversupply and tight credit conditions, experts said on Tuesday.

According to data provided by China Real Estate Information Corp, 29 of the 46 cities that previously imposed home purchase restrictions have lifted them so far, publicly or quietly. The impact of the policy relaxation was felt in 10 cities, CRIC said, adding that the sales upsurge was limited to the first week. Sales returned to normal levels in the second and third week, it said.

A substantial portion of the initial sales growth was triggered by homebuyers rushing to register their earlier purchases, which became legal under the new policy, CRIC said. Previous property restrictions required non-local residents to have several months of social security payment records to buy a house.