What’s new: The Beijing municipal government further eased housing market rules by removing a purchase restriction on divorcees in the latest effort to prop up home sales.
The capital’s housing authority on Wednesday reversed a 2021 policy introduced to curb speculative property investment in an overheating market.
The policy had prohibited residents from buying new property within three years after a divorce if they already owned two properties during the marriage. It was designed to plug a loophole that people used to circumvent the city’s housing rules to buy extra properties through fake divorce.
Several other cities including Shenzhen and Nanjing adopted similar home purchase restrictions on divorcees between 2020 and 2021 to rein in surging home prices.
The easing of restrictive rules may have limited impact on sales given current depressed market conditions. But the move sends positive signals that the authorities are likely to continue easing market restrictions, industry analysts said.
The context: Major Chinese cities have since last year stepped up efforts to loosen local home purchase rules in hopes of spurring demand.
Earlier this month, Hangzhou in the eastern province of Zhejiang removed all restrictions on purchases of pre-owned homes. In February, Shenzhen, one of China’s most expensive megacities, relaxed restrictions to allow more people to buy a home in the city. Beijing, Shanghai and Guangzhou have all revised local rules to expand eligibility for home purchases.
As China’s real estate slump enters a fourth year, it’s weighing down economic growth and denting consumer confidence. Shan Weijian, executive chairman of Hong Kong-based PAG, called for a complete end to home-buying restrictions.
China’s housing market has remained sluggish. In the first two months of 2024, national sales of newly built homes declined 24.8% year-on-year to 960 billion yuan, according to the National Bureau of Statistics.
Contact reporter Han Wei (weihan@caixin.com)
