Economy

China may expand property curbs to more cities

(Agencies)
Updated: 2011-05-04 16:23

China may extend property curbs to the country's third and fourth-tier cities after investors and developers flocked inland following a harsh clamp-down on property prices in major cities, the Shanghai Securities News reported on Wednesday.

To limit the risk of asset bubbles forming in these inland cities, the government may extend home purchase restrictions and price limits on the property sector in these third and fourth-tier cities, the paper said, citing unidentified sources.

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Beijing, which has carried out a pilot program to discourage real estate investment by limiting prices of certain homes while allowing developers to bid up land prices, plans to expand that scheme this year, the newspaper said.

Any new step taken by China to restrain its property market highlights the government's struggle to cool record home prices, which were driven up by rising incomes and a housing shortage.

China has already rolled out a series of property curbs, including home purchase restrictions, property taxes and higher down payments, in Beijing and Shanghai. To date, 36 cities have also placed restrictions on home purchases.

But the clamp-down has pushed developers to move further inland, causing land prices in these less affluent cities to jump.

Property prices in cities hit by current property curbs have also remained stubbornly high, with some continuing to post monthly rises.

Earlier media reports said that the Chinese government may launch new measures to further clamp down on the property sector, such as revising the property price targets set by local governments.