Guangzhou, one of China’s first-tier cities, has recently implemented relaxed restrictions for homebuyers, such as not requiring proof of social security payments and tax filing for non-residents.
Huang Tao, general manager of the project department of Guangdong Centaline Real Estate, said that the introduction of this policy is to help people disadvantaged by the dire economic environment caused by the epidemic. However, he added that this policy could affect very few people in practice.
Housing in China’s first-tier cities is in short supply, and relaxing the purchase restriction policy is a sensitive topic, as relevant departments are cautious when making decisions.
Caixin cited research released on May 31 by market institution Kerry Research Center, showing that 20 cities across the country relaxed their purchase restrictions in May alone, with some cities lifting them all.
However, experts in the China housing market are concerned about the signal behind this policy. More and more second-and third-tier cities have significantly lifted restrictions on the property market. Experts wonder whether first-tier cities will follow and relax the purchase restrictions on the housing market.
Huang Tao said that there are many wealthy people in first-tier cities. If the purchase restriction is relaxed, they can buy houses for property speculation, creating an unfavorable situation for average homebuyers and going against the policy purpose of “housing, not speculation.”
He said that despite the current property market sluggishness, luxury properties in Guangzhou and Shenzhen are still in high demand.
Caixin cited public information showing that in Shenzhen, on May 30, the opening of Hyde Park A, a luxury residential property priced at 17 million yuan (2.55 million dollars) per set, sold 239 residential units in one day.
But China’s overall property market is not very promising, as recent data shows.
Recent data in China shows that property sales in April plummeted 46.6 percent from a year earlier. It was the most significant decline since August 2006 and a further drop from the 26.17 percent fall in March.
Nikkei reported that its land revenue dropped 38 percent year-on-year in April—the most considerable decrease in over six and a half years. Housing sales also fell more than 40 percent year on year in April.