(Bloomberg) -- Cities around China have taken steps to attract homebuyers with sweeteners and price cuts since the country’s top leadership promised to give local governments more room to set property policies at a key political meeting last month.
The southern metropolis of Guangzhou will offer access to public education for buyers of private properties in a suburban district, according to a notice posted on the local government’s website late Tuesday. That makes it the country’s first so-called tier-1 city to use the all-important “Hukou” permits to shore up flagging real estate demand, state media reported.
Guangzhou, capital of the economic powerhouse of Guangdong, will offer what it called “quasi-Hukou” to non-local residents who purchase new private housing in its Huadu district. Purchasers will be provided with a permit that gives their children access to local public education.
Other top-tier Chinese cities, namely Beijing, Shanghai and Shenzhen, have eased homebuying requirements for downpayments and mortgages this year to revive demand. But so far they have refrained from using the sweetener of Hukou — a powerful passport-style permit that’s used by policymakers to regulate population movement as it grants access to housing and medical and education resources in cities.
Other major population centers may follow the footsteps of Guangzhou to stem a further deterioration in housing demand, although Beijing and Shanghai may only see limited loosening on Hukou, Centaline Group analyst Zhang Dawei was cited as saying in the National Business Daily.
Local governments are stepping up efforts to revive property demand as China’s residential real estate slump deepened in July and the central government said after the Third Plenum last month that it will give cities the autonomy to set property policies based on local conditions.
The following are major property easing measures announced by some cities since the conclusion of the Plenum, a twice-a-decade event that sets the course for economic policy in the long term.
- August 6 - Guangzhou will offer “quasi-Hukou” to non-local residents who purchase new private housing in Huadu. As part of efforts to stimulate demand, the Huadu district authority supports developers to compensate homebuyers if values of the properties they buy fall below purchase prices
- August 1 - Suzhou, an industrial hub in the eastern province of Jiangsu, near Shanghai, will give Hukou to buyers of local properties if they already live there as a resident, state media reported
- July 31 - Zhengzhou, capital of central China’s Henan province and home to one of Apple Inc.’s largest iPhone manufacturing sites, ended the use of guide prices for new homes, effectively removing the floor for developers to set prices based on market demand. Multiple Chinese cities — including Shenyang, Lanzhou and Ningde — had already scrapped the sale price guidance curbs earlier this year, according to local media Yicai
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