Suzhou eases housing rules to spur sales

Suzhou in East China's Jiangsu province will relax its homebuying requirements by shortening the time gap between buying and resale, the city government announced on Monday.

Suzhou's easing is in line with a larger trend of local governments relaxing real estate purchasing policies. Real estate companies' share prices spiked on the stock exchanges in the Chinese mainland on Monday, analysts said.

Effective Monday, the required time gap between homebuying and resale of new homes in Suzhou has been shortened from three years to two years. The gap for pre-owned home transactions will be entirely removed, according to a report on ThePaper.cn, a Chinese-language online news outlet.

It also said any property owned in areas with no purchasing limits in Suzhou will not be counted as part of a local family's homebuying limit.

Centaline Property data showed that since the start of this year, more than 100 cities in China have relaxed local homebuying requirements to keep real estate growth stable.

On April 29, a key meeting held by the Political Bureau of the Communist Party of China Central Committee called for efforts to improve real estate policies based on local factors, while reiterating the principle that "housing is for living in, not for speculation".

Liu Lijie, market analyst with the Beike Research Institute in Beijing, said Suzhou's move follows the city's incentives for home loans last year. Monday's move will unleash Suzhou households' homebuying demand, and fulfill local residents' need for a range of living options.

She said similar policy relaxation is expected in other cities in and around the Yangtze River Delta, which encompasses Shanghai and the provinces of Jiangsu, Zhejiang and Anhui.

"As a modern and developed city with bright industrial and demographic prospects, Suzhou commands relatively strong housing demand. We see this round of homebuying relaxation as representative, and we expect further relaxation of homebuying policies in similar cities in the region," Liu said.

Liu further said home loan requirements in many cities have been relaxed and supportive policies for real estate development have been rolled out. Yet, the continuing COVID-19 situation as well as geopolitical tensions have raised existing uncertainty over economic growth, leading to a weak market expectation in the property industry.

Gao Ruidong, chief economist at Everbright Securities, said the current lack of demand is the key reason why the real estate market has been slackening.

"Therefore, we believe that a relaxation of real estate-related regulations in some cities such as Suzhou will better unleash homebuying potential. Yet, with the overall impact of COVID-19 still in place, it will take some time for policy relaxation to result in a real estate market rebound," he said.

"But we believe that the overall steady recovery of the real estate sector will not change. We expect relaxation of real estate regulation on a larger scale, and the downtrend in property sales will be checked, contributing to steady overall economic growth this year."