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Regulator quashes speculation on property curb easing

By Song Shengxia (Global Times)

08:05, June 07, 2012

China will continue property curbs by containing speculative purchases and preventing local governments from easing the property sales restrictions to offset the economic slowdown, China's real estate regulator said in a statement published on its website yesterday.

The country's property market has been developing in a direction envisaged by the policies to limit the property sector since last year, with property prices maintaining a downward trend in the first five months of this year, an unnamed spokesperson for the Ministry of Housing and Urban-Rural Development (MHUD) said in the statement.

The spokesperson said the country will stick to its property tightening measures by continuing to lend credit and tax support to first home buyers and restrict second or third home purchases to curb speculative buying. The official refuted recent media reports claiming the government was planning to ease property restrictions to aid the economy.

China has recently increased focus on supporting growth by encouraging private capital into the banking and railway sectors and launching new subsidy programs to support consumption, fueling speculations of further stimulus to boost growth.

Local governments such as the one in Yangzhou, East China's Jiangsu Province, began loosening property curbs by reimbursing new home buyers, igniting expectations for property policy easing nationwide.

Addressing the speculation, the ministry said it will keep a close eye on such trends and require local governments to correct improper policies to support "unreasonable purchases."

"It sent a signal to the market that the government will neither tighten the property curbs nor ease them," Yang Hongxu, an analyst at Shanghai-based E-house China R&D Institute, told the Global Times.

"The focus will be still on giving support to first home buyers while restricting lending and purchases for second and more homes," he said.

Meanwhile, property sales increased in 25 out of 40 large cities in May, with 10 cities seeing sales growth by more than 50 percent, according to the China Index Academy, causing concerns that developers may raise prices again.

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