The capital of Inner Mongolia seems to have succeeded in finding out how far a Chinese city can go in rolling back policy restrictions on home sales, and the answer appears to be “not quite that far.”
After the government website of Hohhot announced on June 19th that anyone could purchase more than one home in the city – regardless of whether or not they were legal residents – the groundbreaking proclamation was apparently deleted from the Internet this week without explanation.
According to a report in Reuters, the Hohhot edict also raised the maximum amounts for preferential mortgage loans to RMB 500,000 from the earlier RMB 300,000 ceiling.
Hohhot Goes Over the Real Estate Rule Line
While several Chinese cities including Wuxi, Wuhu and Nanning, have tweaked the rules governing home sales in recent months, most have done so not by abolishing the distinctions between residents and non-residents, but by loosening the definition of residency.
The residency stiplulations have been an important part of the central government’s attempts at reducing property speculation by restricting the ability of investors from wealthier cities to ramp up home prices in cheaper communities.
The apparent abrupt reversal in Hohhot comes despite reports in official media during May that more than 30 local governments in China would soon be allowed to remove at least some restrictions on their residential real estate markets.
China’s central authorities rolled out the real estate rules during 2010 and 2011 to cool down an over-heated housing market, after flooding the country with cheap credit as part of a stimulus program in 2009. Local governments, which generally rely on land sales for at least half of their revenues, have made a number of efforts to work around Beijing’s rules, particularly in market slowdowns during 2012 and 2014.