An increasing number of cities around China are using human resource policies to loosen recently launched property restrictions, in what one expert claims is an attempt to outfox the central government’s crackdown on the housing market.
Municipal governments around China introduced a raft of property market control policies in 2017 as part of efforts to contain housing prices, including purchase and sale restrictions, hikes in down payment requirements and curbs on bank lending levels.
While the measures have had a significant impact upon both price growth and transaction levels in key real estate markets, it appears as though many cities are now seeking to wind back the restrictions under the pretext of enhancing their appeal to top-flight talent.
Data from Centaline Property indicates that over the past three months as many as 20 Chinese cities and regions have issued new policies for the ostensible purpose of attracting, at the core of which lie reductions in home purchasing restrictions.
The Gansu-province capital of Lanzhou announced on 5 January that it would cancel residential home purchase restrictions for three of its more remote districts, as well as no longer require the provision of social welfare or tax payment documentation for transactions.
On 9 January alone three of China’s major cities unveiled similar policies, including Tianjin municipality, the Shandong province capital of Qingdao, and the Jiangsu province capital of Nanjing.
Tianjin announced preferential leasing conditions for non-local residents who satisfy human resource policies, while Qingdao cancelled conditions concerning housing area and years of employment for prospective home buyers.
Nanjing completely cancelled home purchase restrictions for “high-level” human personnel, as well as offered housing subsidies of as high as 3 million yuan.
These cities have since been followed a slew of China’s provincial capitals, including Changsha, Chengdu, Dalian, Fuzhou, Guangzhou, Hangzhou, Hefei, Jinan, Langfang, Shenyang, Shijiazhuang.
While it would appear that less prestigious Chinese cities are using the human resource policies to elevate their standing by attracting quality talent to the local economy, experts note that they also serve to boost local property markets.
“None of the cities that have recently adjusted their housing markets are all first-tier or leading second-tier cities,” said Cong Yi (丛屹), a professor at Tianjin University of Finance and Economics to Legal Weekly.
“These cities continue to face the pressures of housing restocking and urbanisation, while they also need to retain high-end talent in order to compete with other cities.”
According to Kuang Weida (况伟大), chair of the National Academy of Development and Strategy at Renmin University, local governments are doing nothing less than engaging in a “chess match” with China’s central government by repeatedly tinkering with their property policies.
In an interview with domestic media Kuang said that the macro-economic conditions were not yet right for loosening, and that the central government should step up enforcement of property control policies.
“Once you have repeated adjustment and loosening, it’s very hard to guarantee the healthy and stable growth of the real estate market,” said Kuang.
The People’s Daily has also weighed in on the issue, with a recent editorial stating that “the basic theme of strict housing market controls will remain unchanged, the pace of the establishment of long-term effective mechanisms will not relent, and our determination to prevent and dissolve risk is unwavering.”