context: In July 2023, a Politburo meeting called for greater fine-tuning of the real estate strategy to align with changing market conditions. Since then, restrictions on purchases, loans, sales and prices that formed the bedrock of efforts to cool the overheated property sector are being removed to release repressed demand. Preliminary results have not been encouraging. Home sales continue to decline.
Guangzhou relaxed home purchasing restrictions on 20 Sep 2023, the first first-tier city to do so
- restrictions in five districts have been removed, meaning individuals can freely purchase any number of properties in those areas
- in the other six districts, families with a Guangzhou hukou are still limited to two homes, while single residents and those without a local hukou are limited to one
- the period for which migrants must pay social insurance to qualify for purchasing a home is now reduced from five to two years
Beijing has already approved easing purchasing restrictions in second-tier cities, but first-tier cities still cannot fully ease limits, an industry insider told Economic Observer. Guangzhou officials have asked higher-level authorities multiple times this year to improve housing policy, according to the report.
Guangzhou has long been at the forefront of easing housing restrictions in first-tier cities, including by being the first to extend preferential first-home deposit and interest rates to purchasers without a home but who had previously taken out a mortgage. Guangzhou is more proactive because its real estate market is the most troubled of first-tier cities, an industry insider told Securities Times, because of its
- larger housing stock
- four straight months of falling sales
- little increase in sales after implementing preferential rates
Guangzhou shows that real estate policy reforms are being gradually implemented at the city level according to each city’s circumstances, notes Securities Times.