Authorities allow Guangzhou residents to buy property in nearby cities using housing provident fund

minutes 2018/12/26 06:21:54
China's News, China's Financial News, Property

Dec 26, 2018 (China Knowledge) - Guangzhou has further eased property restrictions, on Monday; shortly after it removed a ban of apartment sales to individuals. The new easing measures allow Guangzhou residents to pay for homes in nearby cities such as Foshan and Dongguan using the housing provident fund.

The housing provident fund is meant to help middle and low-income residents to buy homes. Employers and employees are both expected to make a deposit into the fund every month and can withdraw this money to buy a home and obtain a low rate loan.

Previously, residents in Guangzhou could only use this fund to purchase a home locally in Guangzhou.

The change can be seen as an acknowledgement that more people are unable to afford homes in Guangzhou itself and have to buy homes in other smaller cities. The greatest beneficiary of this relaxation will be the property markets in nearby cities which are expected to see an influx of cash.

With new property easing measures, China has now shifted from a stance of ‘cracking down’ on rising home prices towards a more moderate stance of keeping home and land prices stable.

More property easing measures are expected to follow, however any further easing will be in relation to non-critical restrictive measures. Critical measures such as the minimum down payment required are still expected to stay in place.

Such easing measures will likely first take place in China’s tier 3 and 4 cities which are facing the most fiscal pressures. More time will be needed for such measures to reach tier 1 and 2 cities such as Shanghai and Beijing.

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