SHANGHAI: China's southern city of Zhuhai on Tuesday became the latest to restrict home purchases and cap property prices after Beijing rebuffed recent talk that it might relax policies aimed at containing property inflation.
Chinese Premier Wen Jiabao stressed at a cabinet meeting over the weekend that China would "unswervingly" maintain its property curbs, although it would fine-tune other macroeconomic policies.
The reaffirmation, dousing off some investors' expectation for a loosening of China's more than one-year long property tightening measures, drove down property shares in Shanghai on Monday. The index was down 1.0 percent on Tuesday morning.
However, Beijing so far has ignored the relaxation of local mortgage rules last month by the eastern city of Nanjing and by Anhui province, after it apparently blocked a similar move by southern Foshan city.
The government of Zhuhai, the fourth city in Guangdong province to impose the heavy-handed purchase restrictions after Guangzhou, Shenzhen and Foshan, said in an overnight statement that as of Tuesday, local families can only buy one more home unit in the main urban area.
Non-local households who have not been paying taxes or social insurance in the city for more than a year can no longer buy any more homes in the main urban area, it said.
The rules are relatively lighter than cities such as Beijing and Shenzhen, but Zhuhai will also cap local home prices at 11,285 yuan per square meter in the rest of the year, according to the statement.
Any developer asking for a price higher than that will be refused the permits to sell their developments in the market.
Data from local real estate association showed the average home price in the city's main urban district was 10,155 yuan per square meter in 2010.
The city, with a population of 1.6 million, is not included in the 70 major cities tracked by the National Bureau of Statistics for home price changes.
The NBS data showed home prices either stabilised or fell in two-thirds of the cities in September as compared with August and the city of Wenzhou even saw an outright fall in home prices in the month from a year ago, showing that housing inflation in China has finally showed some signs of an easing.
Combating inflation remains China's top priority up until now, although Beijing is now starting to stress more often about the flexibility of policies due to many uncertainties at home and abroad, particularly the unfolding euro zone debt crisis.
Property prices are not included in the consumer price index, but rental prices as well as construction material costs are a major driver of Chinese inflation.
China's inflation eased to 6.1 percent in the year to September, still hovering around a three-year high hit in July. Residential prices, included in the CPI basket, rose 5.1 percent during the same period, while housing inflation eased to 3.5 percent from August's reading of 4.1 percent.
