This Chinese city just dialled back its property curbs

First clear case of removing restrictions on home sales

A city in China’s Shandong province has cancelled provisions of a policy that last year prevented buyers from flipping their homes, Reuters reported.

Heze, home to eight million, is reversing a law that forces buyers of new and second-hand homes to hold them for two to three years, in a sign that housing authorities elsewhere could be loosening property curbs that have been rolling out across the mainland for the last two years.

The municipal housing and urban-rural development bureau posted the notice online Tuesday, although it was dated 14 December.

“The policy itself is quite limited in driving up sales but it sent a strong easing signal,” analysts at Hua Chuang securities noted to Reuters.

The moves could foreshadow a “gradually better policy environment”, they added.

Heze’s policy cancellation appears to be unprecedented, with the partially state-run China News Service remarking that it represented the first clear case of a city eliminating curbs on home sales. Previous attempts to undo curbs at the city or regional level have been met with resistance from central authorities with a mandate to quell frothy home prices.

Local conditions drove Heze authorities to roll out the policy decision, the state-owned Securities Times reported, citing officials from the city’s housing bureau.

The Shandong provincial housing bureau had summoned the city bureau to justify the relaxation of the measure, authorities stated.

Heze’s new policy comes as home price growth decelerates in the mainland. New home prices inched up 0.9 percent month-on-month on average in November, down from a monthly growth of one percent in October, according to the National Bureau of Statistics.