“Hukou” policy relaxation may drive property prices up in some cities
Apr 11, 2019 (China Knowledge) - China’s relaxation of its “hukou” household registration policy could help to bring about a surge in property prices in some cities.
The “hukou” policy had previously imposed restrictions on migrants without local residency permits to purchase houses in their new city of residence in an effort to rein in prices.
Non hukou holders were typically required to pay a social security which ranged from between 6 to 60 months in order to be eligible to buy a flat, effectively preventing many migrants from having the means to do so.
A relaxation of this policy could help to release pent-up demand from these migrant workers who have been working in China’s bigger cities for several years without being able to buy a home or have access to government subsidized housing, driving prices up. Currently, 51 Chinese cities have eligibility restrictions and the new policy could see restrictions in up to 33 cities relaxed.
Cities such as Zhuhai, Suzhou and Xiamen that have yet to relax hukou restrictions in their cities will likely see the largest gains while cities surrounding hubs such as Shanghai and Guangzhou will also see some benefits.
Developers will sizeable land banks in tier two cities in the Yangtze River Delta region and Greater Bay Area are also set to benefit from the potential increase in demand and housing prices.
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