One Chinese City Lifts Housing Transfer Restriction

A city in Shandong has lifted transfer restrictions on new housing. Over the past couple of years, many cities restricted the ability of homeowners to flip properties. Some have taken extreme measures, banning sales out to 10 years.

iFeng: 全国首现解除住房限售城市 还有至少95城继续限购
On the evening of December 18, the Housing and Urban-Rural Development Bureau of Heze City, Shandong Province issued the “Notice on Promoting the Renovation of the City's Shanty Towns and Promoting the Stable and Healthy Development of the Real Estate Market” (He Jian [2018] No. 7). The Article 6 clearly states: Cancellation of new purchase restrictions on transfer of housing.

The notice stated that the “Notice of the Office of the People’s Government of Heze City on Further Strengthening the Regulation and Control of the Real Estate Market” (Hin Zheng Ban Fa [2017] No. 42) was cancelled in the “County District with high turnover in the main city and housing and high pressure on housing prices”. The new purchase of housing restrictions transfer measures, that is, the purchase of new commercial housing and second-hand housing to obtain property certificates for at least 2 years before listing transactions, non-local residents to purchase restrictions on the transfer of not less than 3 years.

...According to incomplete statistics, as of January this year, at least 85 cities across the country have implemented “restricted sales”, including Beijing, Xiamen, Hangzhou, Fuzhou, Guangzhou, Hainan Province, Shanghai, Chongqing, Zhuhai, Huizhou, Dongguan, Foshan, Nanchang, Guiyang, Changsha, Nanning, Guilin, Beihai, Minhou County, Changle, Fuqing, Shijiazhuang, Chengde, Baoding, Zhangjiakou, Xi'an, Shenyang, Chengdu, Jinan, Qingdao, Weihai, Dongying, Liaocheng, Heze, Binzhou, Dezhou, Zhengzhou, Kaifeng, Fuyang, Ezhou, Nanjing, Changzhou, Yangzhou, Wuxi, Start, Xuzhou, Zhangjiagang, Kunshan, Hangzhou, Jiaxing, Ningbo, Shaoxing, Wuhu, Lu'an, Taiyuan, Kunming, Changchun, etc.

Subsequently, 10 cities including Dalian, Shenyang, Qingdao, Hainan, Changchun, Harbin, Dandong, Chengdu, Sanming and Ningbo have successively issued sales restriction policies for different years.

Among them, Baoding and Foshan have a limited sales period of ten years, Haikou and Shijiazhuang have a limited sales period of five years, and Xiamen, Hangzhou and Fuzhou are generally two to three years old.
Not all cities have these restrictions:
It is worth mentioning that in November 2016, the media reported that the Ministry of Housing and Urban-Rural Development held a national conference on the macro-control of real estate in some cities in Beijing, clarifying Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Nanjing, Suzhou, Hangzhou, Hefei, 16 key cities such as Xiamen, Zhengzhou, Wuhan, Jinan, Wuxi, Fuzhou and Chengdu should stabilize their prices at the current level. Subsequently, the list of key cities and towns has increased to increase the number of cities with rapid housing prices in Shijiazhuang, Nanchang, Changsha and Qingdao.

Looking at the above 20 cities, only Hefei and Tianjin have not implemented the “restricted sales” policy.

According to a research report by Guosen Securities, the policy of “restricted sales” (individual cities are more than 5 years) after the introduction of housing purchases is not to eliminate the investment demand of real estate, but to curb “short-term speculation”. If the market is full of short-term speculators, it will not only be difficult to play a role in value discovery, but it will inevitably increase volatility. From the perspective of property investment, it is a reasonable investment period to hold the sale after 2-3 years. Suppressing short-term trading is conducive to making the property market run healthier and longer.

Along with Shandong Heze's first policy of lifting housing restrictions, whether there is any follow-up by local governments has become one of the concerns.

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