Zhengzhou tightens housing market

Zhengzhou, capital city of Central China's Henan Province, announced Monday it will tighten its home purchase restrictions in a bid to further curb investment, although more cities across the country are loosening their property policies.

Starting Sunday, single people aged below 20 cannot buy homes in Zhengzhou, and local households without Zhengzhou hukou, or household registration permit, need proof of residence for more than three years and must have paid social security or income tax for more than one year to be able to buy a home in the city, the local housing management bureau said in a press briefing on Monday.

Calls to the bureau on the new policy went unanswered by press time.

Zhengzhou adopted the policy to stabilize the property market as the city's housing prices are under great inflation pressure, Liu Yuan, senior research manager at Centaline Property agency in Shanghai, told the Global Times Monday.

The city's housing prices rose 20 percent in the first half of the year, Liu said. The average new home price in Zhengzhou was 8,422 yuan ($1,376) per square meter in August, its housing bureau said.

However, Zhengzhou's policy tightening is against the market trend, as the new Chinese leadership now puts more stress on market-oriented measures rather than administrative means to rein in the country's real estate market, Hui Jianqiang, research director with real estate information provider Beijing Zhongfangyanxie Technology Service, told the Global Times Monday.

Some local governments such as Wenzhou in East China's Zhejiang Province and Wuhu in East China's Anhui Province have either loosened property purchase restrictions or offered subsidies to home buyers recently, indicating policy relaxation.

"The central government is expected to adopt long-term policies for the property market, such as land system reform, property tax and low-income housing," Hui said.

Partly affected by loosening policies, new home prices continued to rise in August, increasing for the 15th month in a row since June 2012, Beijing-based real estate research institute China Index Academy said Monday.

The average new home price in 100 cities tracked by the institute reached 10,442 yuan per square meter in August, up 0.92 percent from July and 8.61 percent from one year earlier, the institute said in a report.

Meanwhile, 71 of the 100 cities saw their new residential building prices increase in August month-on-month, 10 more than in July.

Without further curbs, the property market will boom in September and October, Hui noted.

China started to impose home purchase limits since 2010, which, however, failed to rein in the housing price surge.

Both the nationwide home purchase restrictions and Zhengzhou's new policy place limitations on the rights of only a group of people, which lack legal basis and symbolize administrative impropriety, Zhang Qianlin, a property lawyer with Debund Law Offices, told the Global Times Monday.

But China is unlikely to stop the home purchase limits, as exit of the policy will lead to a surge in housing prices, which is against the country's target to maintain stable and sound development of the real estate market, Centaline's Liu said.