China's eastern export hub, Wuxi, has joined other major cities in lifting home-purchase restrictions in hopes of attracting buyers. Despite earlier policy-easing attempts to revive the property market, a persistent housing slump continues to put pressure on the world's second-largest economy.
Wuxi, located in the affluent coastal Jiangsu province, has announced the elimination of curbs on home buying. Additionally, the city has implemented a broadened definition of first-time homebuyers and made cuts to mortgage rates and down-payment ratios. These measures were previously announced by Chinese ministries earlier this summer.
In early September, Nanjing in Jiangsu province, along with Dalian and Shenyang in the northeastern Liaoning province, became the first batch of big cities to lift home-buying restrictions. Since then, other municipalities, including Foshan and Dongguan in southern Guangdong, as well as Jinan and Qingdao in eastern Shandong, have followed suit.
While many smaller cities in China have already taken similar measures in the first half of the year, these efforts have failed to generate a significant property rebound. In contrast, China's four first-tier cities—Beijing, Shanghai, Guangzhou, and Shenzhen—have refrained from lifting restrictions out of concerns of potential speculation frenzy and an overheated housing market.
New home starts in China for the first eight months of 2023 have fallen by nearly a quarter compared to the previous year. The decline in property investment deepened in August, and official data shows that home prices have decreased in 52 out of China's 70 major cities, up from 49 in July.
Despite these challenges, Wuxi's decision to remove home-purchase restrictions is a significant step towards stimulating the local economy and attracting potential buyers.