Guangzhou becomes first Tier-1 city in China to lift purchase limits on large homes

Guangzhou, a major southern city in China, has completely relaxed home purchase restrictions for certain individuals, effective Saturday, in a major move to bolster the local property market. 

The city government announced that properties with a floor area exceeding 120 square metres (1,292 square feet) are now excluded from housing purchase limits.

According to Wang Xiaoqiang, an analyst at Zhuge Real Estate Data Research Centre, this policy change allows individuals to purchase as many apartments of that size as they desire, regardless of whether they currently own one or not. 

Wang believes that Guangzhou's decision marks a notable departure from traditional purchase restriction policies among tier-one cities, potentially accelerating the reduction of housing inventory and stimulating activity in the property market.

Guangzhou, like many other Chinese cities, has been grappling with a housing crisis characterised by a surplus of homes and debt-laden developers struggling to complete projects. 

Despite efforts to address the issue, such as increased affordable housing supply and rental subsidies, the city's housing de-stocking cycle remains high at 18.5 months, compared to Shanghai's 10 months.

Despite recent support measures from Chinese policymakers, including easier access to cash for developers and cuts in home mortgage rates, the property market continues to face challenges. 

Sales remain sluggish, and there have been additional instances of developer defaults. However, the housing regulator stressed that cities have full autonomy in real estate regulation and control, allowing them to adjust property policies according to local conditions.

(With Reuters Inputs)