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China new home sales in freefall as more cities relax restrictions

New home sales in April by China’s top 100 developers dropped by 45% year-on-year to 312.2bn yuan ($44.1bn), and by 12.9% in April compared with March, according to the China Real Estate Information Corporation, which indicates that the slowdown is accelerating. 

In an effort to stimulate demand, Shenzhen and Wuhan have become the latest Chinese cities to ease home purchase restrictions to boost sales, as a growing number of major metropolises take steps to support the country’s slumping property sector and shore up confidence. 

Shenzhen, China’s technology hub, said it has lowered the thresholds for the personal income tax and social insurance payments of non-local individuals and families seeking to buy a property in certain districts, while allowing local families with two or more young children to buy additional homes in those areas. The city lowered its down-payment requirements for second homes in November in a bid to revive the pre-owned homes market. 

Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute, said: “The easing measures are still quite localised at this point, but are very strong nonetheless, especially the part about the social security payment requirements, which will create ample opportunities for those who are interested in buying a house.”

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