Business Maverick: China eases housing curbs in Wuhan, paving way for other cities to follow

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A major city in China has eased a key restriction on housing purchases, paving the way for more cities to follow suit and prop up demand as the property slump in the world’s second-biggest economy drags on.

. The city in central China where Covid-19 cases first emerged more than three years ago, supports “reasonable” home purchases, according to the statement.

With a population of 13 million, Wuhan is the first major city to clearly allow homeowners to buy additional units, easing a ban put in place in many metropolitan areas to prevent speculation. “It’s now much more likely that others will follow, most significantly other big cities,” said Chang Shu, chief Asia economist at Bloomberg Economics. “With a more supportive stance from the central government, local governments have been taking steps to shore up their housing markets.”

China’s more than year-long housing downturn is persisting even as local authorities cut mortgage rates and ease down-payment requirements to entice buyers. The 100 biggest real estate developers saw new home sales drop by a third in January from a year earlier, according to preliminary data from China Real Estate Information Corp.

In a 16-point statement, the Wuhan government said it would modify the restriction on homebuyer eligibility based on home prices and inventory, drawing from the central bank, which is allowing cities to remove a mortgage rate floor.

 

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