Beijing eases rules on multiple home purchases to fight property slump

After 13 years, Beijing has eased certain regulations regarding the purchase of multiple homes as part of China’s effort to stimulate a persistently sluggish property market, according to a report in the South China Morning Post (SCMP).

According to a notice issued by the housing authority on Tuesday, families who have reached the existing ownership limits will now be permitted to buy an additional home in the region beyond Beijing’s fifth ring road.

Additionally, unmarried individuals with a Beijing hukou, or permanent residence permit, as well as non-hukou holders who have contributed to social insurance or paid income tax for five or more years, will now have the opportunity to purchase a second property in the region.

On Tuesday, new statistics showed the ongoing downturn in the property market, coinciding with the relaxation of rules initially implemented in 2011 to mitigate speculative purchases.

In April, new home sales by the top 100 Chinese developers dropped by 44.9 per cent year-on-year (YoY) to 312.2 billion yuan (US$43 billion) and declined by 12.9 per cent compared to March this year, the SCMP reported.

The easing of the regulations coincided with the announcement of the long-awaited third plenary session in July by the Politburo, the top decision-making body of the ruling Communist Party. During this session, the Politburo emphasised the need to advance high-quality development of the housing sector.

Furthermore, this development follows the actions taken by two cities, Chengdu and Changsha, to completely eliminate city-wide housing purchase restrictions, as well as Nanjing’s reinstatement of its “buy a home and get a hukou” policy after seven years, the SCMP report stated.

As one of the most priciest housing markets in China, Beijing has implemented a succession of easing measures in the past year. These include reductions in down-payment ratios and mortgage rates. Additionally, the city eliminated a regulation barring divorced individuals from purchasing new homes within three years of a prior purchase in the capital. This rule was originally instituted to deter individuals from fabricating divorces to acquire additional properties.

The SCMP, quoting data from property agency Centaline Property Agency, stated that 80 per cent of the total home transactions in the city in 2023 took place outside the fifth ring road, with the area's inventory of available homes remaining at a similar level.