Potential homebuyers look at a property model in Huaian, Jiangsu province. (ZHAO QIRUI / FOR CHINA DAILY)
A number of cities in China are announcing new measures to stabilize their local residential property market in response to the central government's latest guidance on granting local governments more say in the matter, industry experts said on Tuesday.
For instance, in Jinan, Shandong province, State-owned Jinan Urban Development Group said it will buy existing high-quality apartments for use in the rental housing segment of the market. The company disclosed this in an article published on its official WeChat account on Sept 3.
Prior, the group had made three announcements on purchasing as many as 3,000 units of commercial housing in Jinan's six districts, according to a cls.cn report on Thursday.
Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution, said the Jinan company's move is aimed at satisfying demand for rental housing via multiple supply resources, which can also help destock the housing market.
The State Council, China's Cabinet, has urged cities to frame policies to stabilize their respective property market and boost market confidence.
On Aug 24, the State Council allowed local governments to apply differentiated policies. At another executive meeting on Aug 31, the State Council stressed "one city, one policy" for the real estate sector.
"The meetings showed exactly how important the property market is to economic stability," said Yan.
More policies were announced by the central government to cover areas like credit, land and taxation. This has created an optimistic environment for local governments to issue respective measures in coordinated efforts to improve the real estate sector and stabilize the market, Yan said.
The latest adjustment to loan prime rates in August brought down the over-five-year LPR, on which many lenders base their mortgage rates, by 15 basis points to 4.3 percent, which further lowered homebuyers' purchase costs.
New home transaction space totaled 23.89 million square meters in August in the nation's 100 major cities, a drop of 8 percent month-on-month and down 32 percent year-on-year, according to data from the E-house China Research and Development Institution.
The single-month trade volume slowdown indicates there are still obstacles and uncertainties ahead for the property market to overcome to complete recovery, industry experts said.
Local governments should come up with flexible policies in accordance with their respective conditions to support the firm and rational demand for homes, said Chen Wenjing, deputy director of research with the China Index Academy.
Local governments, especially those in second-tier cities, will likely continue to optimize their policy stance in the short term, be it improved home purchase requirements, lower down payments, reduction in home mortgage interest rates, or accelerated adoptions of new policies, Chen said.
The "one city, one policy" guidance is being applied in a growing number of cities, all of them targeting stable and healthy development of their local home market.
September being the sales peak season, market sentiment and performance are expected to brighten on the back of stronger demand and growing market confidence, Chen said.