Housing stimulus unsustainable

Hohhot, the capital of the Inner Mongolian autonomous region, has broken the silence to become the first provincial capital city to suspend the ban on second-home purchases by local residents.

However, the move taken by Hohhot's authorities to stimulate local housing sales, as a way of easing their fiscal crunch, is unlikely to produce the desired effects in the short run, a Southern Metropolis Daily article said.

It is an indisputable fact that after experiencing a property boom in the previous decade, the current decline in house sales has plunged many local governments in China into a difficult economic position. The reduction in revenue has forced some local governments to cut their spending on infrastructure construction and urban renovation. As a result, targeted measures to boost housing markets are viewed by local governments as the quickest and also most effective means to swell their coffers.