Trials of “one city, one strategy” (一城一策) property control policies by Chinese municipal authorities are on track to expand as the central government seeks to keep the real estate market contained.
“One city, one strategy” property controls were first launched by around a dozen Chinese cities in the first quarter of the year, with the goal of containing high land prices and high housing prices, as well as risk in relation to hefty leverage.
These cities included the provincial capitals of Fuzhou, Changsha, Hangzhou, Jinan and Wuhan, as well as the major regional centres of Ningbo and Xiamen.
21st Century Business Herald now reports that these trials are expected to expand to a greater range of cities following a push from the Chinese central government.
The “one city, one strategy” property control policy consists of individual cities implementing tailored property control policies to suit their own specific market conditions, which can vary tremendously across the breadth of the country.
An example of this is the recent diverging performance of the property markets of Hainan province in the far south of the country and Beijing in the north.
In the third quarter of 2019 Hainan province saw housing sales floorspace of 5.8495 million square metres, for a YoY decline of 48.6%. The province’s housing sales amount was 92.892 billion yuan, for a YoY drop of 44.6%.
During the same period however Beijing’s commercial housing sales floorspace was 5.849 million square metres, for a YoY surge of 43.7%.
Liu Hongyu (刘洪玉), head of the Tsinghua University Real Estate Research Institute, said in a recent essay that “one city one strategy” can be viewed as a new control policy on the part of China’s central government which involves local governments producing their own unique, solutions plans.
According to Liu the new policy sets the foundation for local governments to shift “from passive controls to active controls.”