China offers property-buying perks to families with 3 kids

CHINESE cities are making it easier for families with more children to own multiple properties, as authorities struggle to revive the housing market and boost birth rates.

Hangzhou, the eastern city where internet giant Alibaba Group is based, said Tuesday (May 17) that households with 3 children are now allowed to buy 1 more residence. The third child has to be born after May 31 last year. Such families can also enjoy precedence over other prospective buyers when purchasing new homes. 

The move makes Hangzhou the first major residential market to bundle property easing with birth rates, after at least 7 smaller cities rolled out similar policy tweaks since April. China surprisingly allowed all couples to have a third child last year when births dropped to 10.6 million, the lowest since 1950. 

“Such a policy can spur home buying and encourage having more children at the same time,” said Gao Yuansheng, an analyst at China Index Holdings. “It again shows that China supports ‘real’ housing demand for multi-children families.”

The emerging policy trend is in line with the Chinese government’s years-long principle that “houses are for living in, not for speculation”, a stance it maintained after vowing last month to rekindle demand for homes.

Covid outbreaks have exacerbated a housing slowdown that began last year during a crackdown on excessive leverage in the industry. The central bank on Sunday lowered the floor on mortgage rates for first-time homebuyers, a move that analysts say may do little to arrest the slump. 

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Hangzhou also made purchasing existing homes in central areas easier, after its secondary property market weakened in the first quarter, Gao said. The city’s new-home values still rose in April. 

Other cities may also turn to policies that offer housing incentives for families with more children, said Yan Yuejin, research director at E-house China Research and Development Institute. “Local governments have moved away from universal loosening, and the measures have become more targeted and meticulous,” he said. BLOOMBERG