China to move faster on rules for property over long term

China will maintain stability and consistency of property regulatory policies this year and accelerate establishing a long-term mechanism for real estate regulation.

“China will not waver in its efforts to implement property market regulation and will maintain continuity and stability of policies in 2018,” said Wang Menghui, minister of housing and urban-rural development.

Wang said the relatively rapid growth in home prices has been effectively curbed and there have been positive changes in property market expectations.

As the government maintained purchase restrictions aimed at containing speculative demand, new home prices softened in the country’s biggest cities and recorded slower increases in other major cities monitored by the government.

On a monthly basis, new home prices declined in 12 of the 15 first-tier cities, while those in a further 55 major cities surveyed posted slower or flat growth in February. Average prices for new homes in the cities of Beijing, Shanghai, Guangzhou and Shenzhen all fell from the previous month, data from the National Bureau of Statistics showed.

Liu Jianwei, a senior statistician of the bureau, said the cooling measures yielded desired results thanks to the differentiated control policies implemented by local authorities.

During previous years, rocketing housing prices, especially in major cities, had fueled concerns about asset bubbles. To curb speculation, local governments passed or expanded their restrictions on house purchases and increased the minimum down payment required for a mortgage.

In addition, China will move faster to implement a long-term mechanism for property regulation that ensures supply through multiple sources, provides housing support through multiple channels, and encourages both housing purchases and rentals, said the minister.

This year’s government work report reiterated that “houses are for living in, not for speculation.”

The report said: “We will support people in buying homes for personal use, and develop the housing rental market and shared ownership housing.”

So far, 51 state-owned home renting companies have been set up in 12 pilot cities, where government-led rental management and service platforms were established, the minister said.

Analysts agreed that to build a long-term regulation mechanism for the real estate market, efforts also should be made with regard to land, financing, tax, multi-tier housing supply, as well as property laws and regulations.

The interest rates for home loans picked up in major cities last month, with the national average interest rates for first and second-home purchasing loans increasing to 5.46 percent and 5.79 percent, respectively, according to data from Rong360.com, a mobile financing platform.

Relatively tightened liquidity will effectively contain leverage and curb speculative demand in the housing market, said Yang Xianling from real estate agency Homelink.