An opinion piece published by the flagship newspaper of Chinese Communist Party indicates that there will be no relent in the application of strict controls to China’s housing market.
According to the People’s Daily article entitled “The Housing Market Will Only Be Stable with Tightening” (楼市有“紧”才有“稳”), there will be any “loosening” or “easing” of local property controls despite the stabilisation of the market in some areas.
“At present and even for some time in the future, housing market controls will continue to involve ‘unwavering targets and unrelaxed vigour,'” writes Liu Zhiqiang (刘志强) in the opinion piece.
“The Ministry of Housing and Urban-Rural Development (MOHURD) has recently sent continuous signals directed at the real estate markets of some cities, where overheating has become apparent or speculative investment has reared its head.
“The majority of these cities have already unveiled measures in short order, blocking space for speculation.
“In the vast majority of cities throughout the country, ‘tightness’ has already become the dominant theme of existing housing market controls.”
Liu points out that immediately following the May First public holiday four state-owned banks in Beijing all lifted their first home loan rates, while hikes in home loan rates have also been widespread across China’s first and second-tier hot spot cities.
The Chinese central government also released a circular in mid-May that called for a crack down on the illicit use of residential housing public funds for market speculation.
Liu points out that efforts to contain real estate speculation will be further heightened following the recent launch of major policy initiatives for key regions.
“From the establishment of the Xiong’an New Area last year, to the expansion of the opening of Hainan and the release of plans for the Guangdong-Hong Kong-Macao Greater Bay Area, there have been a significant number of market concepts that are susceptible to speculation.
“If not for the advance efforts by local governments with respect to housing market regulation, they would no doubt be exploited by speculators, potentially causing housing prices to see irrational increases, greatly raising the home purchasing costs for local residents and those with inelastic demand, and ruining market stability.
“Once the market sees irregular volatility, local governments must pragmatically undertake the responsibility of stabilising housing prices and controlling rent
“While real estate controls must be tailored for local conditions, the basic theme of tightness and the goal of stability are consistent across the nation.
“The final goal is to ensure that the broader public have homes to occupy. At present, in addition to strictly preventing speculation and stabilising expectations, various regions are also adopting multiple measures to strong support the owner-occupier housing demand of local residents.
“Lending policies must be strictly differentiated to positively support rational demand. In terms of supply optimisation, residential home development plans must be formulated to suit the urbanisation process and population inflows.
“The most important thing is to accelerate improvements to long-term mechanisms, and accelerate the establishment of a residential housing system with multiple supply parties and multiple guarantee channels, giving equal emphasis to leasing and purchasing.”