Shanghai on Monday rolled out a series of measures to further stimulate the property sector, including the removal of purchase restrictions on suburban homes.
The measures will go into effect on Tuesday, according to a circular published by six local departments, including the Shanghai housing and urban-rural development commission.
According to the statement, there will be no limits on the number of homes purchased outside the outer ring road for families with local household registration, as well as those without local household registration but with at least one year of social insurance or individual income tax payment records in the city.
Adult single individuals will enjoy the same treatment as those families.
"(The move) has drawn considerable attention in the current agency market and among real estate developers. Objectively speaking, it has indeed promoted the positive unleashing of market demand," said Yan Yuejin, vice president of the Shanghai E-House Real Estate Research Institute.
According to the monitoring data of the China Index Holdings, this year, 29,700 new commercial residential units have been transacted in Shanghai, among which over 18,000 units are located outside the outer ring road, accounting for more than 60 percent.
In terms of pre-owned housing, approximately 127,000 units were transacted from January to July this year, of which about 65,000 units were outside the outer ring road, accounting for around 51 percent.
Both new and pre-owned houses outside the outer ring road have contributed significantly to the total transaction volume. Industry insiders say that as many industrial parks are located outside the outer ring road of Shanghai, there are more new home buyers and upgraders in these areas. This policy adjustment will better unleash purchasing power, stimulate the housing market outside the outer ring road, and better support the home purchase and employment of employees.
"The relaxation of housing purchase restrictions in areas outside the outer ring road can provide direct support for boosting and stabilizing the real estate market. It effectively responds to the policy orientation proposed at a State Council executive meeting, which aims to promote the stabilization of the real estate market with greater efforts. All the specific measures taken highlight the greater support for more thorough unleashing of demands for first-time homes or better homes," said Wu Jing, director of the Real Estate Research Center of Tsinghua University.
The State Council executive meeting on August 22 urged efforts to adopt a comprehensive set of measures to unlock the potential of domestic housing demand.
Shanghai relaxes home-buying rules to boost property sector
