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Local gov'ts move to ease home buying restrictions
Last Updated: 2014-05-06 14:45 | CE.cn/Agencies
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A number of local governments across China have recently announced plans to ease restrictions on property purchases to rescue the flagging real estate market, reports the Beijing Times.

Authorities in cities such as Nanning, Wuxi, Fuzhou and Zhengzhou are increasingly concerned about the state of sector as property prices continue to fall, the paper said.

Local governments have in the past relied too much on selling land plots to finance their operations, a property developer told the paper. "We know very well that domestic governments will jump in to rescue the property market," the executive said, adding that developers do not need to cut prices now.

Several city governments have already begun to ease property control policies. Zhengzhou's property bureau said it plans to readjust its house-buying policies as long as the measures are allowed by the national policy. Meanwhile, the Henan provincial government is planning to encourage residents in rural areas to buy houses in cities.

These local governments are testing the bottom line of the central government, and if Beijing does not take a stand then others will soon adopt even looser policies, an industry insider told the paper.

At present, property prices have no room to rise further because many cities have large inventories of unoccupied properties, so it is reasonable to abolish some of the strict restrictions hindering property purchases, said a Shenzhen-based developer.

The market previously speculated that authorities in Hangzhou in eastern China's Zhejiang province would unveil some degree of easing in their property policy during the three-day Labor Day holiday, but as of Monday no such move has been made, the paper said.

Meanwhile, property prices are swaying across the nation with most second- and third-tier cities seeing property price falls, with first-tier cities also unable to escape the trend.

Zhou Anqiao, chairman of Wharf China Development, said his company will not intentionally continue cutting property prices and does not rule out the possibility of price hikes. The developer expects several local governments to unveil relaxation policies for the property market in the coming months, he said.

Zhang Dawei, a research director at Centaline Property Agency, said developers are cutting the prices of their properties because of tightening credit and high inventory pressure. If access to financing remains difficult, then even if the government relaxes restrictions on buying houses the market will experience a cooldown, Zhang said.

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