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People's Daily Online>>China Society

Local governments quiet on housing restrictions

By Fang Yunyu (Global Times)

09:34, December 31, 2011

Nearly half of the 48 local governments that have imposed house purchase restrictions this year have not yet affirmed whether they will continue to carry out the policy, indicating their reluctance to maintain curbs on the sector, experts said Friday.

The central government began implementing its purchase restriction policy nearly a year ago, eventually extending it to 48 major cities, including Beijing, Shanghai and Guangzhou, in a bid to rein in rapidly rising property prices in the country.

According to the schedules announced by local governments, the restrictions in 11 cities are set to expire this weekend. Nine have said the policy will be maintained, but Hefei and Guiyang have not yet made any announcement. Of the other 37 cities included in the policy, 21 have not yet said whether they will maintain it.

"Of course they (local governments) don't want to limit the real estate sector," said Yin Kunhua, a professor at the Real Estate Research Centre of Shanghai University of Finance and Economics .

Yin said many local governments rely heavily on the property sector, because income from land sales has accounted for 50-60 percent of their fiscal revenue in recent years.

"The way the central government addresses the problem is not reasonable," Wang Yongping, secretary-general of the China Commercial Real Estate Association, told the Global Times Friday, adding that restricting people from buying is not an appropriate policy in "a market economy."

Wang revealed that due to the policy, many property developers are under "massive pressure."

Liu Qi, Beijing's Committee Secretary of the Communist Party of China, said last week that the house purchase restriction policy is one of the factors holding back the city's GDP, which he expects to fall by 2 percentage points this year.

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