China allows families of three to buy property

China’s cities are making it easier for families with multiple children to own multiple properties, as authorities struggle to revive the housing market and increase birth rates.

Hangzhou, the eastern city where internet giant Alibaba Group Holdings Limited is located, said Tuesday that families of three children are now allowed to buy one more home. The third child will have to be born after May 31 last year. When buying a new home, such families may enjoy a higher priority than other potential buyers.

The move makes Hangzhou the first major residential market to bundle property facilitation with birth rates after at least seven small towns made similar policy changes since April. China surprisingly allowed all couples to have a third child last year when births dropped to 10.6 million, the lowest since 1950.

Gao Yunsheng, an analyst at China Index Holdings, said: “Such a policy could encourage home buying and at the same time encourage more children.” “This again shows that China supports the demand for ‘real’ housing for multi-child families.”

The emerging policy trend is consistent with the Chinese government’s year-long policy that “homes are for living, not speculation,” a position it maintained last month after promising to revive housing demand.

The coveted outbreak has exacerbated a housing recession that began last year during a crackdown against excessive leverage in the industry. The central bank cut mortgage rates for first-time home buyers on Sunday, a move that analysts say could do little to stem the tide.

Date City To measure
April Shenyang, Liaoning Province Allows a family with a second or third child to purchase another home if the child is under 18 years of age.
April Daozhou, Sichuan Province Allows families with second or third children to enjoy lower down payments, lower mortgage rates and a marginal price reduction.
April Wuxi, Jiangsu Allows families of the second or third child to buy another home and borrow a large mortgage loan.

Gao said Hangzhou made it easier to buy existing homes in the central area after its secondary property market weakened in the first quarter. The value of new homes in the city still rose in April.

Ian Eugene, director of research at the e-house China Research and Development Institute, said other cities could also move toward policies that provide housing incentives for families with more children. “Local governments have moved away from universal relaxation, and measures have become more targeted and subtle,” he said.

© 2022 Bloomberg

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