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Yangzhou seeks property market boost

By Wang Jiamei (Global Times)

08:02, May 09, 2012

The housing regulator of Yangzhou announced on its official website yesterday that it would begin a reward policy for new home buyers, a move that analysts said may turn out to be another short-lived policy by local governments eager to boost the real estate market.

Jointly issued by the finance and housing bureaus of Yangzhou in East China's Jiangsu Province, the announcement said that financial rewards would be offered to people who buy fully decorated houses smaller than 144 square meters from July 1 this year to June 30, 2013.

For houses no bigger than 90 square meters, home buyers will receive a reward of 0.6 percent of the total price; for houses between 90 and 120 square meters, the reward will be 0.5 percent of the price; and for houses of 120 to 144 square meters, the reward rate will be 0.4 percent.

The announcement was taken down from the website earlier yesterday, prompting speculation that the policy had been abruptly scrapped.

But an official from the Yangzhou housing bureau told the Global Times yesterday that they would not abolish the policy, though he didn't explain why the announcement had been taken down.

Later in the afternoon, the Yangzhou housing bureau republished the announcement together with an explanation document, emphasizing that the new reward plan applied only to fully decorated houses, as they intend to promote the construction of such homes.

However, analysts are skeptical about the policy.

"It is obviously a bid to stimulate the bearish real estate market," said Yang Hongxu, a senior researcher with Shanghai-based E-house China.

According to data from the Yangzhou housing bureau, the trading volume of local homes reached 92,900 square meters in April, down 14.18 percent year-on-year and down 17.42 percent month-on-month.

"The move goes against the central government's goal to cool down the overheated housing market, so it is still uncertain whether the local government will call a halt to it in the near future," said Yin Kunhua, deputy director at the Shanghai Real Estate Economy Society.

Though the local housing bureau said the policy is limited to decorated homes, it may have to be canceled, as has been the case with similar policies in other areas, Yang said.

As a result of the restrictions on housing purchases, China's real estate market has recorded declines in both trading volumes and prices since last year, but several local governments have issued loosening policies, which were usually short-lived.

In February, Wuhu in Anhui Province scrapped a housing policy offering subsidies to first-home buyers only several days after it came out. In October 2011, Foshan in Guangdong Province said it would allow residents to buy a second home, but the decision was reversed less than 12 hours later.

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