'One city, one policy' to stabilize real estate sector

The State Council's call for a "one city, one policy" approach to the property sector has indicated that more policies with a precise focus on the local housing market will be worked out, which will ensure the healthy and stable development of the residential property market, industry experts said.

On Aug 24, the State Council, China's Cabinet, raised the "one city, one policy" approach by allowing local governments to take respective measures to support the rigid and upgraded housing demand. Later on Aug 31, during another meeting of the State Council, the policymakers again deployed "one city, one policy" for the real estate sector.

Prior to this, local governments adopted measures for local housing markets based on the requirements of the central government, said Chen Sheng, president of the China Real Estate Data Academy.

"After a period of implementation, cities need to make more appropriate policies according to their existing conditions and decide whether to stick to, drop out of or fine-tune their current measures," said Chen.

"Compared to the measures before, 'one city, one policy' allows local governments greater authority to regulate and/or adjust certain residential real estate policies to fit their local market," said Shaun Brodie, senior director and head of occupier research of China at Cushman & Wakefield.

With this extra policy tool in the box, local governments are now in a position to target specific issues they see in their markets and more precisely target and resolve them to ensure the steady development of the residential real estate sector in their region, Brodie said.

"As the 'one city, one policy' guideline is implemented, measures can be rolled out by lower-level governments such as counties and city districts, and the policies — mostly supportive measures — will be introduced at a higher frequency," said Guan Rongxue, an analyst with the Zhuge Real Estate Data Research Center.

Lu Wenxi, a market analyst with Centaline Shanghai, said the new policy will give more flexibility and precision for local governments to roll out new measures.

"Various policies will be adopted by different areas of a metropolis, as the home market conditions of large cities' various regions are quite different," said Lu.

"Since the beginning of the year, we have noticed that a growing number of local governments are introducing innovative policies to boost their housing markets, including defusing project risks, supporting homebuyers' confidence, activating demand and stabilizing the market," said Sheng Xiuxiu, research director for JLL China's residential sector.

Following this trend, Sheng expects the measures targeting housing markets will differ from city to city. In top-tier and major second-tier cities, policy easing will be very limited, but in smaller cities, measures to relax regulations in the housing market will be more likely to come.

Hui Jianqiang, head of research at Beijing Zhongfang-Yanxie Technology Service Ltd, said the policies fitting the respective conditions of local housing markets will be as specific as the detailed requirements for purchase restrictions and the proportion of down payments, among others.

"The main purpose of the 'one city, one policy' and other related real estate regulations and policies are to stabilize the residential real estate market and the economy," said Brodie.

Overall, China will stand firm on the premise that "houses are for living in, not for speculation", and in the transformation process, measures like "one city, one policy" are expected to stabilize supply and stimulate demand, Brodie added.

Xie Chen, head of research with CBRE China, a commercial real estate services and investment firm, believes under "one city, one policy "guideline, local governments may seek coordinated policies that combine credit, land and taxation according to their respective conditions, to maintain the stable and healthy development of their local real estate markets.

wang_ying@chinadaily.com.cn