East China city lifts home purchase limit

HANGZHOU - The eastern Chinese city of Wenzhou on Tuesday became the latest city to lift home purchase restrictions to prop up the property market.

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Wenzhou in Zhejiang province has a booming private economy. There will be no restrictions on the number of houses people can buy and home purchases will be open to both locals and non-locals, according to the municipal housing authority.

The city set home purchase rules in March 2011 allowing locals to own a maximum of 2 houses and non-locals one. A private lending crisis in Wenzhou since April 2011 meant many manufacturing enterprises went bust and falling property prices followed for more than two years.

The average price for a new home in the city was 14,201 yuan ($2,309) per square meter in May, down 21.7 percent from four years ago. By the end of June, there were 9,780 homes with an area of 1.23 million square meters waiting to be sold, which will take about 13 months for the market to digest at current consumption speed.

Easing of restrictions will not only help local people improve their living conditions but also help digest the housing inventory, according to the municipal housing and urban-rural development commission.

Although the central government has not given a greenlight to loosening home buying limits nationwide, many cities have relaxed restrictions.

According to a report from real estate agent Centaline Property in June, 16 cities in eight provinces had relaxed restrictions since last year.