Chinese City of Hohhot Reverses Course on Home-Purchase Curbs
SHANGHAI--A city in northern China reversed course twice this week and is now dropping its limits on the purchase of second homes, in a sign of the uncertainties in China's softening property market.
A statement on the website of the city of Hohhot in China'sInner Mongolia region said that authorities there won't demand information on a homebuyer's prior home purchases. The move effectively allows residents to purchase second and subsequent homes, a shift from a previous policy that made it more difficult for them to buy a second home and banned them from buying a third.
The statement--dated Thursday--echoed one that the city issued last week then rescinded shortly after, according to local media. The Friday statement from Hohhot'sProperty Development Supervisory and Management Department was headlined "Clarification."
Hohhot is the first Chinese city to issue a written statement to announce a reversal of the administrative curbs, though it isn't clear whether other cities would follow suit. Hohhot, the capital of the Inner Mongolia region, is a modest-size city by Chinese standards, with a population of 2.8 million people.
The about-face reflects uncertainty among Chinese cities about whether and how much to loosen property-market curbs enacted under pressure from China's central government. Other cities have attempted to ease curbs only to retreat days later.
Since 2011, Hohhot, along with more than 40 Chinese cities, had implemented restrictions on the number of homes people could buy, as part of the central government's campaign to rein in speculative purchases that were pushing home prices out of reach for ordinary Chinese people.
But the housing market in many cities outside Beijing and Shanghai are now beleaguered with an excessive supply of apartments. Developers looking clear inventory have started to cut prices. Home buyers, wary of further price cuts, have stayed on the sidelines.
Housing sales in the first five months this year fell 10.2% to 1.97 trillion yuan ($316 billion), compared with the same period a year earlier. Average home prices in China also recorded a decline in May from April, the first month- over-month fall in two years.
This year, central government officials have said that they are giving local governments more autonomy to make changes to their own property measures according to the local conditions. But local governments have been uncertain about how far they can go to loosen the shackles of property curbs, and have tiptoed around the question of loosening.
Write to Esther Fung at esther.fung@wsj.com
A statement on the website of the city of Hohhot in China'sInner Mongolia region said that authorities there won't demand information on a homebuyer's prior home purchases. The move effectively allows residents to purchase second and subsequent homes, a shift from a previous policy that made it more difficult for them to buy a second home and banned them from buying a third.
The statement--dated Thursday--echoed one that the city issued last week then rescinded shortly after, according to local media. The Friday statement from Hohhot'sProperty Development Supervisory and Management Department was headlined "Clarification."
Hohhot is the first Chinese city to issue a written statement to announce a reversal of the administrative curbs, though it isn't clear whether other cities would follow suit. Hohhot, the capital of the Inner Mongolia region, is a modest-size city by Chinese standards, with a population of 2.8 million people.
The about-face reflects uncertainty among Chinese cities about whether and how much to loosen property-market curbs enacted under pressure from China's central government. Other cities have attempted to ease curbs only to retreat days later.
Since 2011, Hohhot, along with more than 40 Chinese cities, had implemented restrictions on the number of homes people could buy, as part of the central government's campaign to rein in speculative purchases that were pushing home prices out of reach for ordinary Chinese people.
But the housing market in many cities outside Beijing and Shanghai are now beleaguered with an excessive supply of apartments. Developers looking clear inventory have started to cut prices. Home buyers, wary of further price cuts, have stayed on the sidelines.
Housing sales in the first five months this year fell 10.2% to 1.97 trillion yuan ($316 billion), compared with the same period a year earlier. Average home prices in China also recorded a decline in May from April, the first month- over-month fall in two years.
This year, central government officials have said that they are giving local governments more autonomy to make changes to their own property measures according to the local conditions. But local governments have been uncertain about how far they can go to loosen the shackles of property curbs, and have tiptoed around the question of loosening.
Write to Esther Fung at esther.fung@wsj.com
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