Three Chinese megacities on Monday eased restrictions on home purchases and Beijing’s central bank said it would ask financial institutions to lower house prices, as the country seeks to pull itself out of a housing slump.
The moves are the latest in a series of pledges from Beijing since last week aimed at kick-starting the world’s second largest economy.
The long-standing real estate sector accounts for nearly a quarter of the gross domestic product and experienced phenomenal growth for two decades.
But a years-long housing slump has been a major obstacle to growth as the country’s leadership targets a 5 percent target this year — which analysts say is highly optimistic given the many problems facing the economy.
Late on Sunday, three major cities in the country said they will make it easier for people to buy homes with measures that will come into effect on September 30.
The southern metropolis of Guangzhou — home to more than 14 million people — has said potential home buyers will no longer be able to “buy houses”, state news agency Xinhua said.
There will also be no “limits” on how many homes a person can buy, it added.
The nearby city of Shenzhen has also eased some purchase restrictions, with buyers no longer needing to “revise their qualifications to buy real estate”, local media said, citing authorities.
And in the economic powerhouse east of Shanghai — the country’s richest city — authorities said they would ease the tax burden on some home buyers and lower mortgage payments.
Most of the announcements came as China’s central bank said on Sunday it would ask financial institutions to lower interest rates on existing loans to “reduce the financial burden on property owners”, Xinhua said.
Yan Yuejin, deputy director of the E-house China R&D Institute in Shanghai, told AFP the moves were driven by “pressure” in the property market.
“Few people buy property these days,” he said.
Getting the property market moving again, Yan said, was key to boosting residual domestic consumption — another drag on growth.
China’s leadership last week unveiled a slew of measures to boost the economy in one of its biggest campaigns in years to jump-start growth.
– The ‘big challenge’ coming up –
But they also warned that the economy was beset by “new problems”.
Markets rallied in Hong Kong and mainland China on the announcement amid hopes of further support.
On Monday, property developers were among the biggest gainers, with Kaisa climbing nearly 60 percent, Sunac up more than 16 percent and Fantasia piling up more than 30 percent.
However, analysts warned that the “bazooka” stimulus was not enough to boost the property market and some were skeptical that Monday’s new measures would do much.
“From a bigger perspective these policies are not that important, as these cities make up a small part of the national property market,” said Zhiwei Zhang, president and economist at Pinpoint Asset Management.
“The key to addressing the biggest challenge remains… it’s financial,” he said.
Highlighting rising government activity, official data showed on Monday that manufacturing contracted for the fifth month in a row in September.
The Purchasing Managers’ Index — a key measure of industrial output — stood at 49.8 points, the National Bureau of Statistics announced.
Still, it represented a slight improvement from 49.1 points and above the 49.5 forecast in a Bloomberg survey.
A figure above 50 indicates an increase in production activity, while below that is contraction.
ll-oho/dan
Source link
