Chinese city drops all home purchase restrictions to boost demand

Langfang city has recently dropped all curbs on home purchases to boost buyer interest, the Beijing Daily reported on Tuesday, the first Chinese city to publicly make such an announcement since the onset of the country’s property crisis last year.

The city of 5.5 million people also urged banks to cut minimum down payments for housing provident funds, used to help fund home purchases.

Fragile sentiment in the sector due to debt woes at many of the nation’s property developers has been further corroded by nationwide threats by home buyers to stop paying mortgages for unfinished projects. China’s new home prices and sales volumes both fell in July from a month earlier, according to a private survey.

This year, hundreds of Chinese cities, mostly small cities, have taken steps to boost demand, offering subsidies, relaxing curbs and cutting down-payment requirements. Curbs on purchases that were introduced by Langfang in 2017 include restrictions on non-residents buying homes.

Langfang in Hebei province, about 60 kilometres southeast of Beijing, has also eased curbs on selling homes in areas near its borders with Beijing and Xiongan New Area, the state-backed daily said.

Langfang’s property market has seen home prices fall for seven straight months through July.