Authorities act after prices soar in capital's new administrative center
Beijing authorities have imposed restrictions on home purchases in the Tongzhou district, which will become an administrative center for the capital, in an effort to curb property speculation.
Apartment prices have soared in Tongzhou after Beijing announced in July that it would develop the district into a sub-administrative center.
Under the regulation announced Friday night, locally registered Beijing residents who already own one housing unit but do not have their household registration in Tongzhou are banned from buying a second house there.
Also, those who do not have a Beijing household registration at all must have paid into the social security fund or the personal income tax system in Tongzhou for at least three years to be qualified to buy a house there, according to the Beijing municipal commission of housing and urban-rural development.
Sales of new homes in Tongzhou district reached 6,233 units in the first seven months of the year, surpassing the whole figure for 2014, data from Hong Kong-based real estate company Centaline Property showed.
Prices have followed sales volume skyward, and the average price in Tongzhou surged 30 percent year-on-year to 28,000 yuan ($4,375) per square meter in the first half of the year. In some projects, prices jumped to 30,000 yuan per square meter this month, media reports said.
Authorities hope the restriction will help promote the stable development of Tongzhou's property market.
There was a marked decrease of potential homebuyers after the restriction was announced, Liu Zixiang, a property consultant of a Tongzhou-based property project, told the Global Times on Sunday.
The new regulation renders about 50 percent of potential homebuyers ineligible, Sun Yongsheng, a property consultant at Regal Park, a middle- and high-end project based in Tongzhou district, told the Global Times on Sunday.
Vice Premier Zhang Gaoli said at a meeting last month that Beijing authorities must prevent blind real estate development and property speculation in the capital's environs.
The restriction will bring housing prices in Tongzhou district under control, at least for the short term, but it is difficult to say much about the longer term because demand will surge as numerous municipal government staff move to work there, Dong Liming, a professor at Peking University and deputy director of the China Land Science Society, told the Global Times Sunday.
"Some property developers will take advantage of this chance to make profits by holding units off the market now and selling only after demand surges in the future, as the existing home supply in Tongzhou is very limited," Dong said.
The restriction may even have the paradoxical effect of putting the district's property sector in the spotlight, and that will draw even more prospective homebuyers and boost prices in the future, Li Zheng, sales manager of the local real estate agency Homelink in Tongzhou district, told the Global Times on Sunday.
Housing transactions that are already in progress and housing for businesses will not be affected by the regulation, according to authorities.
"I feel optimistic about the district's property sector and I plan to buy housing after the prices stabilize in Tongzhou," Chang Chuan, a qualified potential buyer working in Tongzhou district, told the Global Times Sunday.
"The regulation will affect my choice when it comes to deciding in which district I will buy an investment property since I do not work there, and I'd have second thoughts about buying a house there right now as the prices have risen so high," Zhang Shu, a prospective homebuyer in Chaoyang district, told the Global Times Sunday.
The Beijing government issued regulations in 2011 to limit the number of units each household in Beijing could purchase during a period when the government sought to stabilize the property market.
Under that regulation, new home purchases were prohibited for Beijing households that already owned two or more apartments and non-Beijing registered households that owned at least one apartment.
