For a city that professes its priority is affordable housing, Shenzhen appears to be taking counterintuitive steps to bolster its property market by relaxing restrictions that were imposed only a year ago.
The most recent is a decision by the city government to lift a measure that had been intended to cool the market for commercial apartments – homes built within mixed-use developments primarily catering to office and shop tenants.
The “only rent not sell” measures, as they came to be known, were imposed on July 31 last year. The reason cited was that the policy was hampering the development of urban renewal projects, such as the one in Baishizhou, featured recently in Greater Bay Insight. Analysts, however, have suggested that the real reason may be to put some energy back into the private housing market after nearly two years of relative weakness.
A spokesperson for a developer quoted by local media, One Urban Renewal group, said that for village and industrial renovation projects, the sale of apartments will improve cashflow, raise valuations, and help with early-stage financing, thereby accelerating completion times.
Although buyers are still restricted from selling their commercial apartments within five years, the policy change is expected to stimulate the private real estate market, as transactions here will set benchmarks for the rest to follow.
While some analysts told local media they thought the policy would have little practical effect due to the scarcity of projects already on the market, others said they believed it would have a positive effect on sentiment, which had been recovering recently.
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