China’s major southern city of Guangzhou has taken a significant step by fully relaxing home purchase limits for certain individuals, particularly targeting properties with a floor area exceeding 120 square meters (1,292 square feet). The decision, outlined in a notice from the southern city government, allows people to buy an unlimited number of apartments of that size, irrespective of whether they already own one or not.
“Wang Xiaoqiang, analyst at Zhuge Real Estate Data Research Centre, remarked, ‘Guangzhou is the first tier-one city to significantly relax its purchase restriction policy… which will help accelerate a reduction of housing inventory and promote activity in the property market,'” said the expert.
This move is seen as part of Guangzhou’s strategy to address the housing crisis, which has plagued China’s real estate sector. Many debt-laden developers are struggling to complete projects, dampening the confidence of potential buyers and weakening a crucial driver of the country’s economy.
Guangzhou faces pressure in its housing market, with an 18.5-month de-stocking cycle, higher than Shanghai’s 10 months, as reported by China Real Estate Information Corp. New home prices have also witnessed a year-on-year decline for the 12th consecutive month, according to official data from December.
In response to these challenges, Guangzhou has outlined plans to provide 10,000 units of affordable housing and 100,000 low-cost rental housing. Additionally, 18,000 households are set to receive rental subsidies, according to the city’s notice.
Despite the measures taken by Chinese policymakers in recent months, including providing easier access to cash for developers, cutting home mortgage rates, and relaxing rules on home purchases, the real estate market is yet to show signs of stabilization. Sales remain weak, and developer defaults persist.
Addressing the situation, the housing regulator emphasized on Friday that cities have full autonomy in real estate regulation and control, allowing them to adjust property policies based on local conditions.
