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China's Lanzhou eases property tightening measures, more cities may follow
[BEIJING]The Chinese city of Lanzhou has eased property curbs amid a nation-wide clampdown on housing speculation, raising concerns that other cities may follow suit which will further inflate price bubbles in the sector.
The provincial capital of China's northwestern Gansu province, with a population of 3.6 million, lifted property tightening measures in the suburbs while relaxing some restrictions on home purchases in downtown areas, according to a notice posted on the website of the city's housing authority late on Friday.
The country's real estate market has been on a two-year tear, giving the economy a major boost but stirring fears of a bubble. More than a hundred Chinese cities have rolled out tightening curbs in a bid to halt housing speculation.
The Lanzhou government had imposed property tightening measures in the suburb areas only just four months ago. While the city did not provide explicit reasons for the move, analysts said they were likely aimed at addressing high inventories.
Yan Yuejin, an analyst with Shanghai-based E-house China R&D Institute, said the suburbs had been under pressure as inventories remained high in face of rigid government curbs.
Analysts also said Lanzhou's easing may be followed by other second-tier cities where property destocking has not made much progress.
"Lanzhou's move signals the market that there is room for some overly-strict tightening measures to be adjusted," said Zhang Dawei, an analyst with Hong-Kong based property agency Centaline.
Lanzhou also relaxed housing purchase restrictions in its downtown districts, no longer requiring social security statement and tax records, the housing authority said.
The new rules take effect on Jan. 8.
The housing minister signalled in December that China would facilitate property sales by first-time home buyers and those wanting to improve their living conditions in 2018, while stressing that destocking would continue in smaller Chinese cities where inventories remain high.