Will Beijing, Shanghai, and Shenzhen follow up?, Guangzhou became the first first first tier city to officially announce the relaxation of purchase restrictions

Pengpai News reporter Ji Simin

Guangzhou became the first first first tier city within the year to relax housing purchase conditions.

On September 20th, the General Office of the Guangzhou Municipal People's Government issued a notice on optimizing policies for the stable and healthy development of the real estate market in our city. The Notice clarifies the optimization of housing purchase restrictions and value-added tax exemption periods.

Guangzhou Fengguang Xinhua News Agency Information Map

Multi district restrictions on purchase were lifted, and social security for non registered residence residents to purchase houses was "changed from five years to two years"

According to the new policy, Guangzhou adjusted the housing purchase restriction policy to limit the purchase of 2 housing units by registered residence households in Yuexiu, Haizhu, Liwan, Tianhe, Baiyun, Nansha and other districts; Non registered residence households who can provide proof of continuous payment of individual income tax or social insurance in this city for two years prior to the date of purchase are limited to purchase one house.

In this regard, the official interpretation points out that families with registered residence in Guangzhou are still limited to purchase 2 houses in Yuexiu, Haizhu, Liwan, Tianhe, Baiyun, Nansha and other areas.

This also means that Guangzhou will include Panyu, Huangpu, Huadu, and the northern part of Baiyun as non restricted purchase areas.

For families who are not registered residence residents of this city, they are limited to purchase one house in the above areas, and the purchase condition is that they have continuously paid the individual income tax payment certificate or social insurance certificate in Guangzhou for two years before the date of purchase. The original policy required a 5-year personal income tax or social security requirement.

According to the policy, adult single people with registered residence in Guangzhou are still limited to purchase one house in the above areas.

Chen Xueqiang, the research director of the Guangzhou Branch of the China Index Research Institute, pointed out that from the perspective of the introduction of the purchase restriction optimization policy, Guangzhou has included Panyu, Huangpu, Huadu and the northern towns of Baiyun into the non purchase restriction areas, which will significantly relax the qualifications of the city's registered residence and non city registered residence to purchase houses in these four areas, and will also drive a significant increase in the turnover of these areas in the short term. At the same time, it also reduces the qualification of non local registered residence to buy houses in the central five districts and Nansha District, which will boost the activity of Guangzhou's real estate market and the confidence in buying houses, and further stimulate the release of market demand.

The value-added tax exemption period in Zone 9 will be changed from 5 years to 2 years

In addition, the new policy shows that Guangzhou will adjust the exemption period for personal sales of housing value-added tax in districts such as Yuexiu, Haizhu, Liwan, Tianhe, Baiyun, Huangpu, Panyu, Nansha, and Zengcheng from 5 years to 2 years.

Li Yujia, Chief Researcher of the Housing Policy Research Center of Guangdong Provincial Urban Planning Institute, pointed out that currently, housing demand in major cities is shifting towards improvement oriented demand, and the demand for housing replacement in Guangzhou is also quite prominent. However, at the same time, Guangzhou has a large scale of migrant population, exceeding 10 million, and a large scale of rigid demand, showing a trend of both rigid demand and improvement advancing simultaneously. Recently, the number of second-hand housing listings has rapidly increased, the trading cycle has significantly lengthened, and prices have significantly declined, which has also led to pessimistic expectations and, in turn, a market downturn. From July to August, Guangzhou's second-hand housing price index in 70 cities experienced the largest decline. The purpose of changing the value-added tax exemption period from 5 years to 2 years is to reduce transaction costs, promote the smooth process of selling, buying, and exchanging, meet the needs of both primary and secondary housing, and ensure a virtuous cycle between primary and secondary housing.

Will other first tier cities follow up after Guangzhou relaxes purchase restrictions?

According to monitoring data from Zhongzhi, the transaction volume of newly-built commercial housing in Guangzhou has been continuously declining for four consecutive months since April. In August, the transaction volume of newly-built commercial housing was only 504000 square meters, a decrease of 0.6% month on month and 25.7% year-on-year. The supply of newly-built commercial housing in August was 569000 square meters, a decrease of 40.8% year-on-year. From both the supply and transaction sides, the current market supply and demand scale is at a historically low level. In the first two weeks of September, 260000 square meters of commercial residential properties were sold, an increase of 2.4% compared to the first half of August. After implementing the "house recognition but not loan recognition" policy, there was no significant increase in transactions.

Yan Yuejin, Research Director of E-House Research Institute, pointed out that as the first first first tier city to relax housing purchase conditions this year, Guangzhou has a strong signal significance. After the current situation of recognizing houses but not loans, the overall market in first tier cities has shown a positive and active trend, but it does need to be further intensified. First tier cities should play the leading and leading role in the overall recovery of the real estate market, leading other cities across the country to optimize and adjust expectations, and promoting the real estate market to move towards a more sustainable and stable healthy development direction.

Yan Yuejin mentioned that optimizing the purchase restriction policy in first tier cities is a major policy breakthrough after recognizing houses but not loans. "According to our judgment logic, Beijing, Shanghai and Shenzhen will also make corresponding optimization measures after Guangzhou relaxes the purchase restriction policy, but they will not relax in an all-round way, and will have some reservations. From the perspective of relaxation, including regional adjustment, the threshold for non registered residence residents to buy houses, etc., are expected to be further optimized."

Editor of this issue: Xing Tan

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