Restrictions to curb housing speculation in more cities

Updated 2017-05-22 15:31:15 Ecns.cn

(ECNS) -- A 10-year ban on housing transactions in Baoding City, North China's Hebei Province, made the national headlines on Monday, following a series of moves nationwide to cool the property market.

Regarded by insiders as the toughest restriction on house purchases in China, the regulation requires buyers to hold properties for at least 10 years, the longest restricted period on property trade so far, after they receive a real estate certificate.

Industrial analysts said it will be a caution for real estate investors, as there may be more similar measures on the land market in future.

Sales restrictions made it difficult for investors to earn profits in the short term. Those taking higher-leverage in the markets may face higher risks.

On May 20, Chinese cities including Changsha, Wuxi and Jiaxing also issued sales restriction policies in the housing market, bringing the number of cities with similar policies to 30.

"Restricting sales is in fact a measure of deleverage," said Zhang Dawei, chief analyst with Centaline Property. In a trading period of three to five years, it is impossible to attract high leverage investment money in the market.

"Such measures will soon be extended to third and fourth tier cities. More than 50 Chinese cities might launch the policy," Zhang said.

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