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Chinese city reverses decision to end curb on property sales after just 1 day

Beijing

A CITY in China's Jiangsu province abruptly reversed a decision to lift a restriction on property sales, the state-run Securities Times reported on Wednesday.

Zhangjiagang, a small city of over 1 million people near Shanghai, on Tuesday removed a restriction imposed more than two years ago that banned home buyers from reselling their properties within two years of their purchase, according to local media reports.

The Securities Times, citing a local official, said the restriction was indeed lifted on Tuesday but has since been reinstated.

Such policy reversals, while not unheard of, point to the pressure on local governments to shore up a slowing real estate market - critical to local government finances - while at the same time not appearing to running counter to the central government's war on speculative buying.

In July, the city of Kaifeng in China's Henan province back-pedalled on a plan to end real estate curbs while, late last year, the Chinese city of Heze successfully reversed a rule designed to curb real estate flipping.

China's house prices are expected to grow 3.1 per cent next year, the lowest over a calendar year since 2015, a Reuters poll showed, with tightening policies continuing to cool the market even as some easing is expected.

"In effect, the move on Dec 10 sent a strong signal to the market that policy was being relaxed," said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.

"But the reversal showed the local government is reluctant to fire the first shot in loosening policies . . . it is expected that policy loosening would finally arrive after the parliament meeting next year (in March)." REUTERS