China’s northern city of Hohhot waived checks limiting the number of homes each resident is allowed to own, becoming the first in the country to ease government policies to rein in real estate prices.
The provincial capital of Inner Mongolia government will also allow non-Hohhot residents to buy homes in the city, it said in a statement on the local housing authority’s website today. More than 40 cities have limited the number of homes that each family can buy and banned purchases from non-local residents since 2011.
“Relaxing home-purchase restrictions in those less affluent cities is inevitable,” said Dai Fang, a property analyst at Zheshang Securities Co. in Shanghai. “There will be more cities following suit. The central government won’t need to worry about price rebounds as long as they have those biggest cities under control.”
China’s four-year efforts to rein in property prices have included home-purchase restrictions and higher mortgages for buying residential properties. The nation’s real estate industry, facing a surplus of empty units and slowing prices, has become a drag on the world’s second-largest economy.
Hohhot said it will no longer request buyers to show ownership proof of home purchases. Existing home buyers will also be eligible for the easing of limits, the city clarified in the statement today. It was first posted on the regulator’s website on June 20 and retracted due to printing errors, according to an earlier report from Netease.
Hohhot became the first to relax such measures, according to realtor Centaline Group.
The Shanghai Stock Exchange Property Index rose 0.2 percent as of 2:29 p.m., local time. The benchmark Shanghai Composite Index was little changed.
China’s new-home prices last month fell from a year earlier in half the cities tracked by the government for the first time in two years as a slowing economy and excess supply deterred buyers.
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