Abolishing Limits on the Number of Owned Homes
Raising Loan Caps and Other Measures
Local governments in China are introducing a series of measures to ease purchase restrictions in an effort to boost the sluggish real estate market.
According to Yonhap News on September 5, citing Chinese local media such as Economic Daily and Yicai, real estate stimulus policies have been implemented since last month in cities including Beijing, Shanghai, Suzhou in eastern Jiangsu Province, and Changchun in Jilin Province in the northeast. These policies include easing purchase restrictions, lifting sales restrictions, and providing housing purchase subsidies.
For example, the city of Beijing announced and is currently implementing measures to relax housing purchase regulations, such as lifting restrictions on home purchases in suburban areas at the beginning of last month. Under the new policy, Beijing households and non-local households who have paid social insurance or personal income tax for at least two years are now allowed to purchase an unlimited number of homes in new town areas outside the 5th Ring Road.
Additionally, the loan limit for purchasing a second home has been raised from 600,000 yuan to 1 million yuan, and the down payment requirement for homes inside the 5th Ring Road has been unified and lowered from 35% to 30%.
In Changchun, regulations announced at the end of last month state that individuals who make a lump-sum purchase of new real estate in designated areas during September will receive a consumption coupon worth 15,000 yuan (approximately 2.9 million won) per home.
Shanghai also announced last month the "Notice on Optimizing and Adjusting Municipal Real Estate Policy Measures" to expand housing purchase demand. As a result, not only households from Shanghai but also non-local households who have paid social insurance or personal income tax in the city for more than one year can now purchase homes without restrictions in areas outside the Outer Ring Road. This policy also applies equally to single-person adult households.
China Encourages Home Purchases
Furthermore, for the purchase of new eco-friendly homes of a certain grade or higher, the housing provident fund (a long-term savings fund jointly contributed by companies and workers for home purchases) loan limit has been increased by 15%.
Liaoning Province, Chongqing City, and Hunan Province are encouraging private home purchases through large-scale, government-led events such as "real estate expos."
Regarding these local government policies, Economic Daily, a state-run media outlet directly under the Central Committee of the Communist Party of China, commented that "the performance of the real estate market is drawing attention," and predicted that the real estate market would recover in September.
However, there are also forecasts that the housing transaction slump will continue for a prolonged period. According to the National Bureau of Statistics, new home prices in 70 major Chinese cities in July fell by 0.5% compared to the previous month and by 3.4% compared to the same month last year, marking a decline for the 25th consecutive month. Prices of existing (secondhand) homes have also been falling for more than two years.
In China, due to the ongoing slump in the real estate industry, counterparty risks in transactions, and delayed payments to third-party owners, the amount of accounts receivable in the property management sector has been increasing since 2021.
On this day, Evergrande, which triggered the 2021 real estate crisis in China, was delisted from the Hong Kong Stock Exchange. Having been listed since 2009, Evergrande has now been removed from the Hong Kong stock market after 16 years.
Evergrande's trading was suspended after a liquidation order was issued by the Hong Kong court in January last year. The Hong Kong Stock Exchange notified Evergrande of its delisting earlier this month, stating that the company failed to meet the requirements for resuming trading.
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