China’s Shenzhen joins major cities in easing home-buying rules
The nation’s housing slump has dragged on for more than four years, with sales falling further since the second quarter
[SHENZHEN] China’s tech hub of Shenzhen followed other large cities in easing home-buying rules in the latest attempt by authorities in Asia’s biggest economy to contain a prolonged property crisis.
The city will remove home-purchase restrictions for both local families and those without local household registration (also known as “hukou”) who have paid social security or individual income tax for at least one-year in six districts including Luohu, Bao’an and Longgang.
This was according to a statement issued on Friday (Sep 5) night by the local government’s housing bureau and the People’s Bank of China’s Shenzhen branch.
Banks will longer differentiate between first or second home purchases when pricing mortgage rates, the government also said. The new rules take effect from Saturday.
Shenzhen’s move follows similar easing by the capital Beijing and financial hub Shanghai earlier in August, during which China’s home sales extended their drop even as prices declined. The country’s two biggest cities last month announced that eligible residents would be able to buy an unlimited number of homes in suburban areas.
The nation’s housing slump has dragged on for more than four years, with sales falling further since the second quarter. The worsening decline in prices also signals that the effects of a stimulus blitz a year ago are wearing off, stoking concerns about deflation.
In the face of an enduring trade war, China is seeking to bolster the domestic economy and offset the threat to exports from US tariffs.
Premier Li Qiang recently reiterated the need for action to stop the decline in the real estate market at a meeting of the State Council, or China’s cabinet.
The groundwork for the latest support measures was laid during the National People’s Congress in March, when China vowed to “fully unleash” demand from buyers who need homes or seek to improve their housing conditions. BLOOMBERG
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