Home Sale Restrictions Continue to Intensify in Cities Across China


The scope and intensity of housing sales restrictions in China have continued to increase, as municipal governments endeavour to cool down overheating real estate markets.

Since the measure of housing sales restrictions was first introduced in Beijing in March of this year, the practice has since spread to at least 47 municipalities across China.

Property sales restrictions lie at the core of China’s current round of real estate market controls, with the chief goal of curbing speculative investment and stabilising expectations by constricting transaction volumes and liquidity.

The restrictions usually involve a prohibition on the sale of recently acquired properties for anywhere between two to five years from the date that title is obtained

According to Securities Daily at least 8 counties and cities launched or stepped up their sales restrictions during China’s recent Golden Week holiday in October, after a raft of provincial capitals dialled up policies in September.

In September alone as many as 45 municipalities issued a total of 52 real estate-related policies, making it one of the single months in modern Chinese history with the largest number of new policy releases.

Restrictions continue to intensify, with the Hebei province capital of Shijiazhuang issuing a new set of transaction and registration regulations on 16 October that impose a sales restriction period of five years upon economically affordable housing.

The move follows the release of the “Supplementary Opinions on Strengthen Real Estate Market Controls” by the Shijiazhuang municipal government on 27 September, which restricted non-registered residents to the purchase of a single residential house, after first providing documentary evidence that they had paid personal income tax for at least 24 successive months during the past three years

The opinion also prohibited the sale of newly purchased home by local residents for five years from the date of title issuance.

Shijiazhuang is not the only major Chinese city to introduce or step up housing sales restrictions since the start of October.

The Zhejiang province city of Shaoxing released regulations on 12 October restricting re-sales of both new and pre-owned homes for two years from the date that title is obtained.

On the same date the Yunnan province capital of Kunming launched its own sales restrictions prohibiting the re-sale of newly built commercial residential homes in Chenggong district for two years from the date title is obtained.

Shortly prior to this the Shanxi province capital of Taiyuan launched sales restrictions in six municipal districts, also prohibiting the sale of newly purchased residential homes for a two year period from the date of title acquisition.

Just after the conclusion of the October holiday, Hainan province raised the sales prohibition period on residential homes acquired by investors from outside the province to five years in the municipalities and counties of Haikou, Sanya, Wanning and Lingshui.

According to Zhang Dawei, chief analyst of Centaline Property, a total of 50 cities around China have launched home sales restrictions, which alongside efforts to expand urban rental supply and joint property rights comprise the core of long-term mechanisms for adjusting the real estate market.

“In actuality sales restrictions are a deleveraging policy for the real estate market,” said Zhang to Securities Daily. “A three to five year transaction cycle already isn’t that likely to attract highly leveraged capital. This will not impact owner-occupier demand…but it can contain speculation.”

Zhang expects sales restrictions to further spread from first-tier cities and provincial capitals to third and fourth-tier cities – in particular those situated close to the major urban centres.

“Where purchase restriction policies are not enough to contain urban markets, sales restrictions will be imposed.”