According to insiders, China wants to help the ailing real estate sector with further aid. The authorities, including the housing ministry, the central bank and the financial regulator, would implement measures in the coming weeks that they had been working on under the guidance of the State Council for the past few months, two people familiar with the plans said. The authorities wanted to intervene because the measures taken so far had not succeeded in creating an upswing in the sector.
Proposed steps include lifting restrictions on home ownership in non-core areas of major cities like Beijing, Shanghai and Shenzhen, three of the insiders said. Such restrictions have existed in many cities since 2010. These include restrictions on purchases by so-called unqualified non-residents. The number of properties that individuals can purchase is also limited. Many smaller towns have eased such restrictions in the past two years to boost demand. But big cities, which are traditionally the target of speculative purchases, held back here.
The proposed package of measures also includes the gradual abolition of price caps for new properties, two insiders said. With such limits, local governments wanted to control prices. The repeal would allow property developers to raise or lower real estate prices. The State Council Information Office did not respond to requests for comment. There was also no initial reaction to the information from the Ministry of Housing, the Central Bank and the Financial Supervisory Authority.
China’s real estate industry has been an important driver of economic growth for years. The sector accounts for a quarter of the economic output of the People’s Republic. But in the meantime he has been slowed down by meager house sales and defaults by construction companies.