Local property markets under scrutiny

State Council sends inspectors to check policy implementation

The State Council said on Tuesday that it will send eight teams later this month to inspect the implementation of property policies as local authorities come up with various ways to relax property curbs.

The move aims to "further ensure that the property regulation measures are implemented, speculative housing demand is curbed, and to strengthen the effects of the property regulation measures", the State Council said in a statement.

Potential homebuyers look at a model of a property development in Nanjing, Jiangsu province. The central government has stated again that property policies should be fully implemented. [Photo/Xinhua]

The teams will go to 16 municipalities and provinces, to inspect how well policies on housing purchase limits and differential credit have been carried out, and check the supply and management of residential land and the implementation of tax policies, it said.

The municipalities and provinces include Beijing, Tianjin, Shanghai, Chongqing, Hebei, Jiangsu, Zhejiang and Fujian, according to the statement.

The inspection teams will urge regions where the property regulation measures are not strictly followed to rectify the situation, it said.

The move came just one day after Nanjing, the capital city of East China's Jiangsu province, proposed to promote the property market by offering favorable housing provident fund loans to first-time homebuyers and subsidizing purchases by "qualified professionals".

The city will also allocate as much as 2 billion yuan ($313 million) in provident fund loans to affordable housing construction by the end of the year, it said.

Yin Xiaobo, director of the Jiangsu branch of China Realty Research Center, said the policy could be seen as a way to ease the restrictions in the city's property market.

"It's a signal that local governments are trying to further boost the property market," Eric Zhang, a Beijing-based property analyst at China International Capital Co, the country's biggest investment bank, wrote in a note to clients on Monday.

"No major relaxation of the curbs could be accepted at the moment by the central government for now, so Nanjing has chosen to support first-time buyers and affordable housing."

Xue Jianxiong, an analyst from China Real Estate Information Corp, a realty information services provider, said the attention the central government is paying to the property market will obviously renew confidence among consumers.

Many cities have attempted to ease property curbs imposed by the central government since the second half of 2011 in response to diminishing revenues from land sales.

The measures have included subsidizing purchases of refurbished homes and allowing first-time buyers to borrow more from the public housing fund.

Apart from Nanjing, many other major cities, including Beijing, Shanghai and Tianjin, have introduced measures to ease property curbs since the end of 2011.

Beijing has offered certain tax incentives since the end of last year for purchasers of new homes.

The central government tightened curbs on the property sector in 2010, with house prices beyond the reach of average wage earners.

The government issued a series of restrictions to control house purchases in several cities by requiring higher down payments and introducing property taxes.

Although sales revenues in the property market have been affected severely by the restrictions, it has recovered in recent months due to the measures introduced in a number of areas.