One Day Only Buying Restriction Relief

Chinese media notices that many cities cancel their buying restrictions for only one day (usually less than a day). Local governments can ease buying restrictions, but an outright cancellation is the "red line."

The article doesn't really get at the heart of why cities are doing this. There's discussion of wanting to rescue the real estate market, high inventory, etc. This isn't news. What is news is that instead of using various methods such as easing hukou regulations and other buying restrictions, Hohhot did an exact repeat of what happened in Shenyang. They announced a full cancellation of all buying restrictions and then rapidly retracted. Somehow Hohhot and Shenyang received the exact same message within hours of announcing their policy. My best guess is they are testing the waters.

Even if the cancellation held, easing buying restrictions is a bad policy because it won't work. It allows speculators and investors to buy up homes, but the trend now is for investors and speculators to sell homes. It may help the big investors who need to offload 100 homes to another big investor, but speculation has died down considerably. In cities that have eased policy, they have made it easier for home buyers to obtain residency. Those cities have made home buying more attractive. Easing residency rules is also the policy favored by the leadership. Hukou reform and urbanization involve moving millions of people from the countryside to the cities, and the biggest impediment right now is the fact that non-residents cannot gain residency in many cities. Without residency, they cannot gain access to many social services, including sending their children to a government funded school. Easing residency rules kills two birds with one stone as far as the central government is concerned.

多地救楼市政策一日游 触碰取消限购红线就被叫停
June 25, Hohhot relevant departments issued a document called "copy number of queries are no longer required to provide proof housing," which is equal to cancel the purchase, sometimes caused widespread concern.

But that afternoon, the file is removed. Some media said that the department is responsible for related work Minister Li said, "The government has a word document printing error, you need to re-publish." But as " First Financial Daily ago, "reporter writing, these files are not republished.

Also on the 25th, there is news that, following the April Wuxi hukou Deal lower threshold after housing area, June Supervision Center in Wuxi for each property buyers no longer check the original housing conditions, and the staff of the Commissioner of property confirmed that indeed no restriction.

However, Wuxi City Housing Authority official microblogging later said, Wuxi has canceled the purchase of houses purely a "rumor." Wuxi experienced a suspected cancel the purchase of the "tour" phenomenon.

Multi-city bailout "day trip"

"First Financial Daily" reporter Statistics found that not only Hohhot, in recent years, including Shenyang, Foshan, Wuhu and other cities, have experienced a property market bailout "tour" of the phenomenon.

First began relaxed restriction "tour" of the city of Foshan. October 11, 2011, Foshan building housing the Bureau issued a document that from now on the purchase of four people to relax.

However, late in the day 23:24, Foshan building housing the Bureau has issued an emergency notice, said a stay of execution.

Coincidentally. November of that year, Chengdu was relaxed restriction policy, ranging from the purchase of the family as a unit to relax on an individual basis, after media reports, this policy has been tightened hole then.

Subsequent February 9, 2012, Anhui Wuhu city government introduced a number of home buyers grants, subsidies policy. However, after only three days, Wuhu shouts suspended this policy.

Shanghai E-House Real Estate Institute researcher Yan Yuejin said that in 2011, in 2012 the local government a bailout would lead to the fate of being suppressed, indicating that the timing of the bailout has not arrived yet. When "that time is precisely the power of purchase of the policy cast, many cities suited to policy tightening, so the urge to adjust, but at that time the entire property prices rose a lot of pressure, so from the overall consideration, the bailout is tantamount to violation of policy ideas, so will lead to pressure. "

In the new round of market downside period this year, according to the central government classification regulation requirements, a number of second and third tier cities or untied fund by way of purchase or deed of subsidies to stimulate the market, and the last round is different, the current round of deregulation , to save the city more than a dozen cities get most of the upper default, Shenyang and Hohhot is the only exception.

June 10, the real estate market in Shenyang heavy news broke, saying Shenyang expressly abolished the purchase, just buy a house, locals and foreigners can purchase multiple dwellings. Message a market in an uproar. However, one day after the Shenyang municipal government departments that this message be denied, Shenyang cancel the purchase only experienced a "day trip."

Centaline chief market analyst Zhang Dawei told the "First Financial Daily", the one that no matter what action will be stopped, as long as this one is to cancel the purchase without touching the root of the red line on the right, but once touched will was stopped. Because direct cancel the purchase, its impact on the market too obvious, all too risky.

Why flip-flop?

So why would frequent the local government of this capricious "day trip" phenomenon? This is one of the biggest key is to bring the property inventory downstream pressure force high [ Introduction News ] enterprises, real estate development and investment growth decline in land premiums decrease, thereby affecting regional economic development.

Shenyang, for example, the data show that a quarter of the average turnover of Shenyang has been declining, dropping gradually increased. As of the end of May, Shenyang 18.28 million square meters of new housing stock over Shanghai, Tianjin, second only to the country's highest (21.1 million square meters), to the needs of 22 months.

According to Institute data, Hohhot inventory to require 37 months in 35 cities ranked inventory to the greatest pressure.

"Land supply in these cities are large, the potential to have a lot of pressure." Said Zhang Dawei, compared to 2011 and 2012 only affected the real estate property market cycle, the current round is not only the property market, the economic downturn in many parts of the region more obvious, so the current round of local rescue impulse greater.

Yan Yuejin also believes that local government bailout, on the one hand due to pressure on the stock, housing prices relatively slow-paced real estate sale, the credit tightening a greater financial pressure; on the other hand, from the industrial point of view, a lot of urban economic development on the property market reliance on large, this model is currently hard to change.

Dawei noted that the last round of the place was stopped shortly after the bailout, credit began to relax, and this more than anything bailout policies have used. This round of the Central Policy adopted classification regulation, the regulation allows local governments to adopt different policies according to their own situation, but did not significantly relax credit. Therefore, the current round of bailout in place-based, local government policy "day trip" also means having to test the market reaction.

However, after Shenyang and Hohhot cancel the purchase of the "tour", the local government at the time of the next bailout should try to avoid touching the outright cancellation of the purchase of this red line. Dawei said that the local government will try to adopt a verbal notification window guidance way to take some of such residence, population release of "Bypass" deregulation policy, rather than directly to cancel the purchase.

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