China’s central government made a pair of moves last week to gain tighter control over the nation’s unruly real estate market, setting a four year horizon for centralising registration of property deals, while also expanding the range of its regular real estate market surveys by more than 400 percent.
On Thursday, the country’s Minister of Land and Resources, Jiang Daming, set the clearest timeline yet for establishing a central property database, saying that the new nationwide system would be operational within four years.
The real estate registration system, which the government has planned for some time, is an important tool in the central government’s attempts to limit real estate speculation and control property prices, as many existing regulations limit the number of homes that may be owned by a single household, but until now the government has lacked a means for tracking housing ownership beyond the local level.
A Reuters report cited a statement by Jiang to the official media as follows, “We will use about three years to fully establish a unified registration system of real estate, and use about four years to run a unified real estate registration information management platform.”
In statements last month, the Ministry announced that the new system would be implemented on a pilot basis in the cities of Nanjing, Ningbo and Zhengzhou starting in June this year.
Bureaucracy Likely to Resist Property Registration
While the central government has now made its intentions clear, many observers still expect the initiative to encounter fierce opposition at the local level. Any effective registration system for property ownership has the potential to expose the asset holdings of government officials, and the potential for uncovering wrongdoing or unexplainable wealth is likely to breed obstructive behavior from the bureaucracy.
Expanding Market Survey into Lower Tier Cities
In another step towards gaining a firmer grip on the nation’s real estate market, China’s top economic planning agency issued orders to expand central government surveys of housing and land prices from the current 70 cities to more than 300 communities, according to a report in Bloomberg.
The move by China’s National Development and Reform Commission (NDRC) to quadruple the coverage of the property survey involves collection of home and land sales data from all cities of prefecture level and above, and comes among growing concern regarding potential property bubbles in China’s lower tier cities.
The notices from the NDRC required the relevant local governments to submit their statistics by April 10th, and specifically cited slowdowns in home price growth and housing sales, as well as the trend towards developer discounts in some cities.
While housing prices in China’s larger cities have continued to climb in 2014, the number of cities nationwide reporting price increased dropped to 57 out of 70, compared to 62 in January. Once the survey is expanded to more than 300 cities, a clearer picture may emerge of the health of real estate markets outside of the major communities.