Hainan hit hard by curbs

Hong Kong

CHINA'S tropical island of Hainan is basking in the glow of a raft of favourable economic policies, some unveiled by none other than President Xi Jinping.

But, now, it's also notable for something else: China's first province-wide home-buying restrictions, after previous curbs were expanded in an announcement on Sunday. To get a sense of the scale, that's an area a bit bigger than Belgium. The intent is to curb speculative investors attracted by the policy goodies.

Chinese developers with big exposures to the island slumped on Monday. Agile Group Holdings Ltd fell 6 per cent.

"The restrictions are more rigorous than expected, and they come with immediate effect," said Yan Yuejin, a Shanghai-based analyst at property data and consulting firm China Real Estate Information Corp.

The latest curbs include requirements for non-residents or new residents to have two-year work records to make home purchases, according to a statement released by the provincial government on Sunday, which also pointed to a tightening-up of land supply.

Officials are encouraging builders to put undeveloped residential land to other uses, such as rental homes. A previous round of curbs came three weeks ago. BLOOMBERG