China city loosens property rules amid market cooling


A Chinese city has slightly loosened regulations on house buying as it looks to boost the local economy, the latest sign of the impact of a cooling in property prices on the broader economy.

House prices in China rose at double-digit rates in most cities last year, but the pace of gains have slowed since the start of the year as central government measures to rein in price gains took effect.

Residents of an economic zone near the city of Nanning in the southern Guangxi province will be given the right to buy property in the city, according to an article on the official Xinhua news agency's affiliated XinhuaNet website.

The article, citing a document from the Nanning city housing department, said residents of the zone would have the same rights to buy property as city dwellers.

An official of the housing department told Reuters that the document was minutes from a recent meeting, but could not confirm the content.

As prices cool, speculation about a relaxation of policy has swirled in some markets.

Other cities that are seeing the steepest corrections in prices due to excess supply, including Hangzhou and Wenzhou in eastern China and Changsha in the south-central region, are also considering easing rules, according to property developers.

The developers, who have been approached by local governments to discuss the impact of any loosening, said the cities were likely to lift restrictions on purchases of second homes. But the measures might not be announced publicly, they added, as that would run contrary to China's strict housing policy.

Local governments are very dependent on housing and land sales for revenue to boost their economies, but have had to curb real estate markets at the behest of the central government, which is concerned about the risk of a housing bubble.

Source from : Reuters