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Major Chinese cities ease home purchase limits to boost property sector


Two of China's major cities, Suzhou and Shanghai, followed Guangzhou in easing home-buying restrictions to boost property sales.

The eastern city of Suzhou completely relaxed home buying restrictions for new and resale home markets, according to state media People's Daily on Tuesday. Previously, residents in Suzhou were only allowed to buy up to three apartments with less than 120 square meters.

Shanghai also eased some of its home purchase limits on Tuesday, allowing certain tax-paying individuals in Shanghai to buy homes in some areas. They were previously banned from buying property in the mega city, the nation's financial hub.

These moves come after Guangzhou completely eased purchase limits on large homes last week.

The property market, once a pillar of the world's second-biggest economy, has suffered a liquidity crisis since mid-2021 when the China Evergrande Group, at the time China's largest property developer, began to default on its liabilities. This triggered many developers to default on, or delay, debt payments.

China's central bank, financial regulator and ministry of housing and urban-rural development all vowed support for targeted and reasonable financing of real estate firms in recent months, in a bid to optimize policies for both supply and demand.

The ministry reiterated at a meeting last week that China needs to give cities full autonomy to adjust their housing policies based on local market conditions.

Currently, only eight cities such as Beijing and Hangzhou, as well as Hainan Province, still maintain purchase restrictions in some areas, according to Jin Ke, a researcher from China Index Academy, a major Chinese real estate research firm.

"Large second-tier cities are expected to completely abolish housing purchase restrictions across the board," said Jin, adding that the move will help increase the activity of the local market and promote the stable development of the property market.

(With input from Reuters)

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