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The cities of Shenzhen and Wuhan have become the latest Chinese cities to relax home purchase restrictions to shore up the sluggish housing market.
Shenzhen, China’s technology hub, has lowered the thresholds for the personal income tax and social insurance payments of non-local individuals and families seeking to buy a property in some districts, while allowing local families with two or more young children to buy additional homes in those areas.
The latest move came after Shenzhen lowered its down-payment requirements for second homes in November in a bid to support the second-hand home market.
“Shenzhen’s latest policy is in line with expectations, and an indication that there will be more policy easing in the country in May,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute.
“The easing measures are still quite localised at this point, but are very strong nonetheless, especially the part about the social security payment requirements, which will create ample opportunities for those who are interested in buying a house.”
Wuhan, the capital of central China’s Hubei province, announced a series of new measures to boost its second-hand homes market. The city’s housing ministry and other authorities said local households who are seeking to sell their homes and buy a new one will be eligible to lower mortgage rates and those who have successfully “exchanged” their homes within a designated period of time will be entitled to a certain amount in subsidies.
The two cities’ latest measures come after the Politburo, the top decision-making body of the Communist Party’s government call on April 30 for local authorities to “digest existing inventory” while “optimising policies around new housing.”
“The easing of both pre-owned and new home rules will be an important force to revive the country’s property market,” said Yan.
Other major Chinese cities have recently unveiled measures to encourage home purchases. The capital city of Beijing on April 30 relaxed home purchase restrictions for the first time in 30 years, allowing locals and non-locals who meet social insurance payment requirements to buy an additional house on the outskirts of the city.
During the May Day holiday, the financial hub Shanghai’s real estate association and other industry bodies unveiled an initiative aimed at providing greater benefits to residents seeking to sell their home and buy a new one. Chengdu in southwest China said in late April that it would no longer review qualifications for those interested in buying a house, while pledging greater support for developers’ “reasonable financing needs”.