South China Morning Post showed an April 3 report by the China Index Academy that more than 60 city authorities began to ease property restrictions in the first quarter. This change is due to China’s priority to stabilize amid the Omicron outbreak rather than reform a slumping, debt-ridden industry.

China has made “stability” a top priority in its economic decision-making this year, ahead of the Communist Party’s national congress in the autumn. This event will usher in a once-in-a-decade leadership reshuffle.

The given easing measures include lowering mortgage interest rates, subsidizing house purchases, reducing down payments, and offering financial aid to developers.

Quzhou, in the eastern province of Zhejiang, announced the immediate removal of restrictions on both purchasing and selling apartments on April 1, making it the first city in China to do so this year.

Authorities in Qinhuangdao, a port city approximately 300 kilometers east of Beijing, lifted five-year-old restrictions on home purchases last week.

According to Shanghai-based news outlet The Paper, Qinhuangdao authorities said previous restrictions were no longer appropriate for the current development situation of the city’s real estate market.

The China Index Academy said more municipal governments would follow suit, saying “the overall policy relaxation has been intensified and accelerated.”

However, in the aftermath of Omicron’s new blow and the Russia-Ukraine war, the latest indicators show economic activity contracting in March.

Crane Real Estate Research reported that March sales of Top 100 real estate companies plunged 53% year-on-year, while their first-quarter sales dropped 47% from a year earlier.

Beijing said in March that it would postpone expanding its trial on property taxes this year to ease market concerns about regulation.

China’s Finance Ministry stated, “Considering all aspects of the situation, there are no suitable conditions to pilot the property tax reform in more cities this year.”

Ren Zeping, the Chief Economist and Director of the Evergrande Think Tank, stated that property market stability was required for overall stability.

He added, “In the face of multiple challenges such as frequent [coronavirus] outbreaks, the Russia-Ukraine conflict, China-US trade frictions, and increasing downward pressure on the economy, stabilizing the housing market is an objective need to stabilize the basic economy.”

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