SHANGHAI: China plans to give first-time home buyers financial support but will keep a crackdown on property speculation in place, the Minister of Housing and Urban-Rural Development was quoted as saying by Xinhua on Friday.
This marks a subtle change in China's two-year-long campaign to take the heat out of the real estate market, efforts that have driven down property sales nationwide and home prices in an increasing number of cities.
"China will unswervingly stick to measures to cool the property market and will continue its differentiated credit and tax policies," Minister Jiang Weixin was quoted as saying.
"We will support residents' reasonable housing demand and will prioritise mortgage demand for those buying their first homes."
His remarks are in line with analysts' expectations for a loosening in mortgage rules for non-speculators as Beijing fine-tunes its monetary policy to ensure the world's second largest economy does not slow sharply.
"The overall tightening stance will stay," said Tao Qi, a senior analyst with real estate consultancy Centaline in Shanghai. "(Jiang's) remarks will not change developers' expectations of a gloomy outlook next year."
Many of China's biggest developers, including China Vanke and Evergrande Real Estate, have slowed construction and suspended land purchases in anticipation of a deepening downturn in the property market.
The domestic property share index has slid 17 percent so far this year but is still outperforming a 21.5 percent drop in the benchmark Shanghai stock index, which has been plagued by worries about a hard landing for n China's economy. To support economic growth, China's government has promised to step up investment in public housing.
Jiang said China aims to start building at least 7 million units of state-subsidised homes in 2012, down from this year's target of 10 million but up from 5 million in 2009. China will finish building 5 million units in 2012, higher than the 3 million units built this year, he was quoted by Xinhua as saying.
The Shanghai Securities News had reported earlier on Friday that China aims to build 4 million units of such homes next year, adding that these building targets will for the time become performance measures for local officials.
Relentless rises in property prices in recent years have pressured Beijing to increase the supply of low-cost houses to help China's middle-income families fulfil their dreams of owning a home.
But China struggled to meet its target of 10 million home starts this year, and local property analysts have said many home starts are little more than holes in the ground. Shanghai Securities News said funding pressures had prompted the cut in target for new home starts in 2012, citing unnamed sources at the housing ministry. The housing ministry has said in the past that each unit of public housing typically takes two or more years to complete.
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