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House supply policy of China

Monetary easing policies were implemented after the Lehman shock resulted in skyrocketing housing prices in Beijing Shanghai and other major cities in China As a countermeasure the Chinese government implemented a series of policies that made it more difficult for the acquisition of houses after October 2009

Although house price fluctuations were affected by political tightening and repetition of mitigation and others it was never stopped to raise housing prices especially in large cities while rather acquiring houses became increasingly difficult

Although the policy implemented by the government from 2009 had some effects in reducing housing prices it could never stop the housing price rise and housing acquisition difficulties

Source National Bureau of Statistics China

Monthly sales price of commercial housing compared with that of the same month in the previous year (after 2007)

End of 2008 Economic recovery through reduction of interest rates and exemption of real estate acquisition tax etc

October 2009Implementation of housing price suppression policies Abolishment of tax incentives (real estate transaction tax and personal income tax) Implementation of differentiated housing loan policy

March ~ April 2010Purchase of house was limited in 48 cities Higher down paymentinterest of loan for the second house Restriction of banking loan to developers

January 2011Further increase of down paymentinterest of loan for the second house Trial introduction of property tax for the third house in Shanghai and Chongqing Increase of house supply through provision of affordable houses

September 2014 Decrease of down paymentinterest of loan for the second house by the central bank Policy for limiting house purchases was abolished in most cities Promoted expansion of financing route and supported banks and other financial institutions to issue housing bonds and REITs

Restriction Easing Easing

()

February~March 2016bull In cities without purchase constraints the

reduction of initial payment of housing loan to 20 was possible

bull Possible further reduction in real estate transaction taxes and business tax

April 2016bull Only First Class Cities such as Shanghai

Shenzhen successively issued new policies to constrain purchases

February~March 2015bull The central government and regional governments will issue

relaxation policies such as consumption acceleration of houses at stock in the Second- and Third-class cities tax reduction supply of subsidies to solve regionality and constitutive issuesof the real estate industry

Restriction

March 2017bull The Tier1 and Tier2

cities such as Beijing and Shenzhen have launched regulation policies continuously