Is China's position on property market thawing?

BEIJING - As China's stock market witnessed the longest consecutive rally in over two decades, the property sector emerged as the biggest winner.

Property developers' shares gained more than 2.8 percent on average over reports of impressive sales and, more importantly, signals of relaxed housing market restrictions.

Lanzhou, capital city of Northwest China's Gansu Province, eased controls on home purchases in some areas last Monday following more than eight months of restrictions, while forbidding sales of properties in core downtown and popular areas within three years of purchase.

Nanjing, Qingdao, Tianjin, Zhengzhou, Wuhan and several other cities followed suit in the past two weeks by adjusting their housing policies, including offering subsidies for young professionals to settle in these cities.

In a bid to attract talent, Beijing's neighboring city of Tianjin decided last week to allow qualified professionals to enjoy local household status just by renting a home. The city saw falling sales in both new and second-hand houses last year.

Local housing market policy changes gave rise to concerns that China is thawing its stance on property market management after a slew of tightening measures last year.

However, the moves by these cities are more about fine-tuning previous policies rather than backtracking on their stance to control the market, analysts pointed out.

It should be noted that first-tier and popular second-tier cities haven't changed their housing policies yet, said Cong Yi, an economics professor with Tianjin University of Finance and Economics.

Mortgage interest rates, the key factor keeping speculative property investment in check, rose about 10 to 20 percent in early January in some cities, making it more burdensome for home purchasers to borrow money from banks.

Housing loan growth slowed to 22.2 percent in December last year, down 14.5 percentage points from December 2016, official data showed.

A statement released after the Central Economic Work Conference last December said that China will maintain policy consistency and continuity and adopt differentiated property policies.

"Housing is for living in, not for speculation" is still the guiding principle for housing market development in China, while cities are just applying it in different ways, said Gu Yunchang, chairman with the national property commerce chamber.

"You just can't count on one uniform policy to be the silver bullet for all cities or all the time. Fine-tuning of housing policies is necessary to ensure a sustainable property market," Cong said.

Applying different policies for different housing types will support first-home buyers and upgraders in China and curb speculation in 2018, Wang Menghui, minister of housing and urban-rural development, said at a meeting last month.

Large and medium-sized cities with net population inflow should step up development of the housing rental market and set up State-owned home rental companies, while third- and fourth-tier cities and counties should continue to reduce unsold housing, according to the minister.

Chinese property developers, both big and small, have ramped up investment in the housing rental market while Internet giants like Tencent and Alibaba also jumped on the rental service wagon.

The rise of housing rentals is one important structural change for China's property market, while more efforts are required to ensure tenants enjoy the same housing-related rights as home buyers, Cong said.