Hangzhou, a major city in eastern China, removed all of its remaining homebuying curbs in the latest example of a local government pursuing aggressive easing to end the property crisis.
The capital of Zhejiang province will remove all restrictions on residential property purchases and no longer review the qualifications of homebuyers, a statement on the local government’s website showed Thursday. Removing the restrictions placed in 2016 will enable the “stable and healthy development” of the real estate market, it said.
The city of about 13 million, home to Alibaba Group Holding Ltd. and Ant Group Co., made the move after the ruling Communist Party vowed last week to study measures to tackle excess housing inventory that’s exacerbating the nation’s property slump. Larger cities including Beijing and Shenzhen have taken only incremental easing steps since the policymaker meeting.
“Hangzhou is sending a strong signal that homebuying loosening can be absolute and decisive,” said Yan Yuejin, research director at E-house China Research and Development Institute. “There has been growing criticism that current local easing measures are too small and too slow, just like squeezing toothpaste out of a tube.”
All cities — with the exception of Beijing, Shanghai and Shenzhen, where the housing market is stronger — will emulate Hangzhou to remove homebuying curbs, said Zhang Hongwei, founder of Jingjian Consulting, which advises real estate companies.
Last month, the southwestern city of Chengdu fully removed buying restrictions, joining dozens of smaller peers. The capital of Sichuan province has a population of about 21 million.
Sentiment among homebuyers in China has been crushed by falling prices and worries that cash-strapped developers won’t be able to finish building properties. Home sales at major developers dropped about 45% in April.
Hangzhou will also strengthen credit support for the property sector, including lower mortgage payments for some homebuyers, according to the statement.