In the face of the sluggish real estate market, several cities in China have recently introduced “buy a house, get a household registration” policies, including some major cities with populations approaching tens of millions. To boost property sales, these cities have also joined the competition to attract residents.
Authorities in Hefei issued a notice on May 15 titled “Hefei Municipal Notice on Further Adjusting and Optimizing Real Estate Policy Measures,” which includes ten aspects of real estate control policies like implementing home purchase subsidies and optimizing sales policies. One of the measures allows individuals who legally obtain ownership of residential properties in Hefei to apply for household registration at the local public security bureau for themselves, their spouses, children, and parents.
Simply put, buying a house in Hefei grants the purchaser household registration rights.
With a registered population of 9.853 million in 2023, an increase of 219,000 people from the previous year, Hefei had the largest population growth increment in mainland China. Industry experts believe that this move by Hefei will stimulate new potential housing demand.
Hefei is not alone in this approach. Since May this year, several large cities with populations ranging from eight to nine million on the mainland have also introduced policies where buying a house allows for household registration.
On May 13, Foshan, Guangdong, issued a notice promoting the stable and healthy development of the real estate market, allowing non-local residents who own legal property rights in Foshan to apply for household registration at the property location, permitting spouses and minor children to move in. By the end of 2023, the registered population in Foshan stood at 9.6154 million.
Nanjing announced on May 11 a notification regarding the settlement of legal and stable residences, further relaxing settlement conditions for non-locals who own legal and stable residences and live in Nanjing, allowing them to directly apply for permanent residency. In 2023, Nanjing had a registered population of 9.547 million, an increase of 55,900 from the previous year.
In a bid to attract newcomers to settle, Shenyang has even more relaxed conditions. On May 1, the Shenyang Municipal People’s Government Office issued a policy document promoting the settlement of external populations, introducing ten measures to boost population development. This policy not only removes the quota restrictions for point-based settlement but also expands the scope of educational and kin support for settlement. Additionally, individuals working, renting, or studying in Shenyang are eligible for household registration.
Yan Yuejin, research director at E-House Research Institute, told the Shanghai Securities News that the recent housing and settlement policies introduced in many places diverge from previous talent settlement policies and focus more on housing consumption, lowering the settlement threshold.
Many Chinese netizens have expressed dissatisfaction with the household registration policies imposed by the Chinese Communist Party.
User “TalkAboutStocks_Change” commented: “We must restrict household registration for children, denying fair exam opportunities for born and unborn children is the best retribution for future generations.”
“Corner of the Sea” added: “Only China and North Korea have household registrations worldwide.”
To stimulate the real estate market, local authorities across China continue to unveil new policies. On May 17, the People’s Bank of China issued three consecutive optimized individual housing loan policies, reducing the minimum down payment ratios for first and second homes to 15% and 25%, respectively. These policies also abolish the lower limits on interest rates for first and second home loans nationwide and lower individual housing provident fund loan rates by 0.25%. By May 24, eleven provinces, municipalities directly under the central government like Hubei, Guangxi, Yunnan, Shanxi, Ningxia, Shanxi, Gansu, Hebei, Shaanxi, and Guangdong (19 cities in the province), Chongqing, as well as selected cities like Changsha and Hefei, had announced the optimization and adjustment of housing credit policies, uniformly lowering the minimum down payment ratios for commercial individual housing loans. The down payment ratio for first homes should be no less than 15% while for second homes, it should be no less than 25%. At the same time, the policy cancels the lower limits on interest rates for commercial individual housing loans, achieving market-oriented loan rates.
From the central government to local authorities, continuous efforts to stimulate the real estate market are being made, propelling people to buy homes amid a persistent contraction in both supply and demand in the Chinese real estate market.
On May 17, the National Bureau of Statistics of China released data detailing changes in the selling prices of new and second-hand residential properties in 70 major cities in April 2024. Selling prices of new and second-hand homes across the nation continued to decrease significantly, reaching new highs in recent years.
In April, among the 70 major cities, only six saw an increase in selling prices of new residential properties, a decrease of five cities from the previous month, while the remaining 64 cities experienced price decreases, accounting for approximately 91%. In first-tier cities, selling prices of new residential properties fell by 0.6% compared to the previous month, expanding by 0.5 percentage points. Second and third-tier cities saw selling price decreases of 0.5% and 0.6%, respectively, a 0.2 percentage point increase over the previous month.
Moreover, selling prices of second-hand homes are also on the decline. Prices in first-tier cities dropped by 1.1% compared to the previous month, an increase of 0.4 percentage points, while second and third-tier cities saw a 0.9% decrease, an increase of 0.4 percentage points.
When compared year-on-year, new residential property prices in first-tier cities decreased by 2.5% in April, an increase of 1.0 percentage points from the previous month, with second and third-tier cities seeing decreases of 2.9% and 4.2% respectively, an increase of 0.9 and 0.8 percentage points compared to the previous month.
Analysts at ZG Data Research Center, such as Senior Analyst Guan Rongxue, point out a further downward pressure on new home prices in April, with a general expansion in the overall decline trend across the 70 cities. The number of cities with price increases has significantly dropped to historic lows. Overall, the market prices appear to continue their downward trend without signs of stabilization.
According to data released on the same day by the National Bureau of Statistics, from January to April 2024, the sales area of new commercial residential buildings decreased by 20.2% year-on-year, totaling 2.93 billion square meters, with residential sales areas down by 23.8%. The sales revenue from new commercial residential buildings amounted to 2.81 trillion yuan, a 28.3% decrease, with residential sales revenue decreasing by 31.1%.
Additionally, real estate development investment continues to decline. From January to April, national real estate development investment reached 3.09 trillion yuan, a 9.8% year-on-year decrease, with residential investment down by 10.5%.
Moreover, the inventory of commercial housing is increasing. As of the end of April, the nationwide inventory of commercial housing was 746 million square meters, a 15.7% increase year-on-year, with residential inventory growing by 24.5%.