Second-tier stability
In March, more than 30 second- and third-tier cities in China issued regulations for their heated housing markets. Experts said that the efforts demonstrate the government's determination to curtail speculative buying and slow the rapid growth in real estate prices. Thanks to judicious regulations, cities such as Hangzhou, capital of East China's Zhejiang Province and Southwest China's Chongqing have managed to maintain vibrant housing markets, even though price growth has leveled off and the number of nonlocal investors has declined. Still, local residents wonder whether the regulations will continue to be effective in the long term.
A recent wave of new home-buying restrictions across the country has helped cool many overheated local property markets in China's second- and third-tier cities, demonstrating the government's determination to curb speculative buying and slow the rapid ascent of real estate prices.
More than 30 second- and third-tier cities rolled out home-buying restrictions in March. Some cities, such as Hangzhou, capital of East China's Zhejiang Province and Xiamen, East China's Fujian Province, issued more than one set of regulations in the month.
For example, Hangzhou prohibited residents with local household registration from owning more than two homes in the city, according to an announcement by the Hangzhou Housing Security and Management Bureau on March 2.
It also required home-buyers without local household registration from buying a home unless they first prove that they had paid personal income taxes and social security fees for at least 24 straight months.
On March 28, Hangzhou city government further tightened home-purchasing regulations by defining second-home buyers based on the number of apartments listed under their names, as well as by their mortgage records.
"Housing prices in Hangzhou started surging after the G20 summit was held in the city in September [2016]," said Angie Wang, a local resident.
According to what Wang has seen, the average home price in Hangzhou in March grew 2 percent month-on-month to more than 20,000 yuan ($2,897) per square meter.
The average home price in Hangzhou stood at about 18,000 yuan per square meters in September 2016, according to a report by the E-house China R&D Institute.
"Many of my friends are seeking to buy apartments, despite the housing curbs and rising prices," she told the Global Times on Tuesday.
Tighter regulations
Houses from about 30 real estate projects in Hangzhou will hit the market in April, media reports said.
Since the beginning of 2017, Hangzhou real estate market has been hotter than the markets in other second-tier cities, said Liu Yuan, senior research manager at Centaline.
On March 28, Hangzhou announced a new property market regulation that many people called the strictest in the city's history, Liu told the Global Times on Tuesday. The situation shows that previous regulations had failed to control the surge in local property prices that started in November 2016.
"Hangzhou is an agreeable city to live and invest in, so the potential demand is growing," said Yan Yuejin, research director at the Shanghai-based E-house China R&D Institute. "Meanwhile, it is undeniable that some speculative factors exist."
Yan predicted that the new regulations will cause the city's home prices to level off for a while.
The ongoing efforts to rein in runaway prices show that the city's real estate market remains under great pressure and more regulations are likely to be issued in the future, experts said.
