China’s Guangzhou first to completely ease purchase limit on large homes Reuters via

© Reuters. FILE PHOTO: Residential and commercial buildings are located in downtown Guangzhou, China October 7, 2017. Picture taken October 7, 2017. REUTERS/Bobby Yip/File Photo

BEIJING (Reuters) – China’s major southern city of Guangzhou fully relaxed home purchase limits for some people on Saturday and said it would increase affordable housing supply, in a move to support the local property market.

Properties with a floor area of more than 120 square metres (1,292 square feet) are excluded from housing purchase restrictions, according to a notice from the southern city government.

The move means that people can buy as many apartments of that size as they want, whether they already own one or not, said Wang Xiaoqiang, analyst at Zhuge Real Estate Data Research Centre.

“Guangzhou is the first tier-one city to significantly relax its purchase restriction policy ……which will help accelerate a reduction of housing inventory and promote activity of the property market,” said Wang.

China is battling a deep housing crisis, with many debt-laden developers unable to complete projects, dampening the confidence of would-be buyers and severely weakening one of the economy’s biggest growth drivers.

A large supply of homes has added to pressure on the market in Guangzhou.

Guangzhou’s housing de-stocking cycle is 18.5 months, higher than Shanghai’s 10 months, according to a report in December from China Real Estate Information Corp.

New home prices also fell year-on-year for a 12th consecutive month in December, official data showed.

The city plans to provide 10,000 units of affordable housing and 100,000 low-cost rental housing, and to give rental subsidies to 18,000 households, according to the notice.

Chinese policymakers have rolled out support measures in recent months to prop up a crisis-hit sector, such as easier access to cash for developers, cuts in home mortgage rates and relaxed rules on buying homes.

However, the market has shown little sign of stabilising, with sales staying weak and yet more developer defaults.

The housing regulator said on Friday that cities are given full autonomy in real estate regulation and control, and they can adjust their property policies based on local conditions.