Cities fine-tune housing policies to bolster market

Since the end of September, seven cities across China have fine-tuned their housing policies in an effort to bolster the lackluster market.

Most of the fine-tuning involved increasing the limit of the public housing fund. Homebuyers are allowed to borrow more money from the fund when buying their first, and in some cases, second homes.

Jiangmen and Shenzhen in Guangdong province, and Zhenjiang in Jiangsu province have adopted this policy.

Tianjin’s new policy allows homebuyers to finish the online contraction process with two payments, although the first payment should cover no less than 30 percent of the house’s price.

This local fine-turning has yet to be blocked by the central government, which vowed several times in July and August to maintain its firm stance on tight house purchase limits.

Central government policies to bolster the slowing economy, including interest rate cuts in June and July, and local governments’ fine tuning early this year helped fuel expectations of price rises. China’s housing turnover and prices rose significantly from June to August.

However, the momentum did not continue. In September and October, house sales slumped again as expectations of the market warming up were dampened by the central government.

Analysts said dwindling fiscal revenue is a major reason for local governments’ efforts to boost the market. Land transfer fees account for the lion share’s of local governments’ fiscal revenue.

In the first three quarters, land transaction revenue fell 11 percent year-on-year, according to the National Bureau of Statistics.