Following Beijing, Shanghai and Shenzhen, Guangzhou was the last among China’s four top-tier cities to roll out a new set of home purchase restrictions. The southern municipality on Monday adopted some of the rules set by its peers and gazetted a five-point policy package.
In the past few weeks, a swarm of non-local home buyers swooped down on Guangzhou to hurriedly complete transactions as they feared the city would soon follow its three peers and tighten its property curbs. And they were right.
Guangzhou’s new rules are mainly aimed at second-home buyers – down-payment is now raised to no less than 70 percent – and non-local buyers – who must now contribute to the city’s social security fund or pay income tax for a minimum of three years. By comparison, Shanghai just requires two years of fund contribution from buyers who don’t have household registration in the city.
Also, developers of low-density housing estates like villas and townhouses are no longer allowed to issue pre-sale consents until the completion of their projects, and this year’s overall residential land supply will be further boosted by 20 percent, which means more plots will be made available for the rest of the year.
On the same day that Guangzhou announced its new curbs, the National Statistics Bureau (NSB) also released home price changes in the 70 NSB-monitored cities for October. Despite previous rounds of crackdowns, Guangzhou still booked an alarming 20.1 percent year-on-year home price surge, the sharpest among all the 70 cities.
Naturally, Guangzhou cadres are now under immense pressure to tame this year’s home price growth to 7.5 percent – a target that was made clear to the public at the beginning of the year.
Whether the new measures will have any sustainable cooling impact is hard to tell, but using Shanghai property market as a reference, it may at least ease property price surge expectations and reduce demand by disqualifying some potential buyers.
– Contact the writer at [email protected]