Chinese property stocks go down after 8 more cities introduce restrictions on resale of housing

By BizClik Admin
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China has introduced more restrictions on the resale of homes in its major cities.

Taking effect from Saturday (23rd September), 8 cities rolled out various restrictions.

The restrictions mainly prevent the resale of residential properties between 2 and 3 years after their purchase.

 

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The cities to have introduced new restrictions include: Changsha, Chongqing, Guiyang, Nanchang, Nanning, Shijiazhuang, Wuhan and Xi’an.

This means that in total 44 cities now have similar restrictions around China, with more expected to follow.

One of the strictest cities to introduce curbs is Shijiazhuang, the capital of Hebei province, which has prohibited the resale of homes within five years of purchase.

It is hoped the curbs will reduce speculative buying of homes, prevent sharp price declines that could trigger systemic financial risk, and keep investor cash in China which would otherwise flow abroad, for example to the US.

This move comes after a home price growth in August dipped to 8.3% year on year, which marked the slowest pace in over a year. Top cities Beijing and Shanghai experienced substantial deceleration.

Hong-Kong listed property developers saw a drop in share prices on Monday as investors reacted to the new restrictions, which surprised many who thought that the government would ease restrictions.

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