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China may Tighten Property Cooling Measures as Several Cities Introduced New Restrictions

02-19 14:34 Caijing
The revamp by local governments would become a signal for further property-market restrictions nationwide, analysts say.

A few Chinese cities have tightened their belts on loans from the country's housing provident fund since January, sparking speculations that Beijing may take further actions to cool the still sizzling property market.

Cooling measures were taken by cities of Kunshan in Jiangsu province, Dongguan in Guangdong province and Jinhua in Zhejiang province over the period, including higher mortgage standards and a reduction in the maximum of mortgage loans, news picked up by major Chinese media outlets said.

Other cities like Chengdu, Sichun, are also reportedly considering similar measures regarding home purchases using borrowed money from the mandatory fund.

The revamp by local governments, which is in sharp contrast to the scenario in the second half of last year, when favorable polices were introduced by over 30 cities to encourage first-home purchases, would become a signal for further property-market restrictions nationwide, analysts say.

Policy regulations in the property sector are "moving into a sensitive period", according to Xie Yifeng, a well-known independent property analyst.

While the average price in 100 Chinese cities recovered by 1 percent from the previous month in January, according to China Index Academy, Zhu Zhongyi, vice president of the China Real Estate Association, told Hexun.com the government may expand a property tax program-currently piloted in Chongqing and Shanghai-to a few dozen cities.

"Policy makers will not want the house prices to rise too fast, there is no doubt," said the house expert. He added that there are enough policy instruments left to curb the property prices.

Markets and homebuyers are also looking to two upcoming annual conventions-the National People's Congress and the Chinese People's Political Consultative Conference-in March for potential policy changes.

Cement stocks tumbled on Tuesday led by HUAXIN CEMENT, which fell 7.3 percent; shares of real estates and construction materials, dragging down China's stocks.

But according to Mr. Zhu, the government would not implement tougher policies ahead of the "two sessions" because "stability will be the priority".

This March will not become an inflection point for policy changes, echoed by Mr. Xie. "The strong rebound in prices remians controllable for the government, which is also acceptable for the market," he said.

Data published by the China Index Academy showed 27 cities had seen transaction volumes up during the week-long Chinese holiday from a year ago, with 14 of them more than doubled.

 

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