Wuhu in eastern China’s Anhui province became the latest city to loosen restrictions on home sales last week as the country’s local governments try to rekindle their once-raging real estate markets.
According to an announcement posted last week on the website of Wuhu’s housing fund office, purchasers of second homes in the city can now enjoy subsidized loans – a benefit previously available only to first-time home buyers.
The city government also opened the doors for residents who have been working for companies in Wuhu to immediately apply for low interest loans through the city’s housing fund office, without having been on the job for at least six months as was previously required.
More China Cities Easing Restrictions
Prior to Wuhu’s move last week, a few other cities had already begun to tug at the web of policies put in place over the last four years as the country tried to restrain inflated house prices.
Tongling, a city close to Wuhu in Anhui, announced early last month that it would offer a one percent subsidy on the cost of a new home for first time home buyers who buy units smaller than 144 square metres, effectively waiving the city’s deed tax. The city also began offering residency permits for out-of-towners who buy homes.
Earlier the cities of Nanning in Guangxi province and Wuxi in Jiangsu had expanded the pool of buyers receiving preferential treatment under the housing restrictions by relaxing rules regarding residency.
With the exception of Wuxi, all of the cities that have publicly revised their policies to date would be considered third-tier or lower in China.
Not Wuhu’s First Time at the Policy Forefront
As property prices slumped during 2012 Wuhu made headlines for first rolling back some real estate restrictions dictated from Beijing, and then rapidly restoring those guidelines after apparent intervention from the central government.
This time the city in Anhui seems more in line with a general loosening of policies, particularly for smaller cities. Late last month official media reported that more than 30 local governments would soon be allowed to remove at least some restrictions on their residential real estate markets.
However, many experts question the effectiveness of legal tweaking such as undertaken by Wuhu, due to the massive oversupply reported in China’s second and third-tier cities.