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Suzhou tightens property curbs for the fourth time in 2019 as overheating home market has defied policies to cool prices

  • The tightening came after heated property price and sale in Suzhou
  • Other developments, including a policy see-saw in Kaifeng, and funding tightening, signal no ease in property control

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An uninhabited property development that has come to symbolise the real estate rush in Suzhou, on May 24, 2017. The island, just 5 kilometres from downtown Suzhou, was built in 2007 has remained uninhabited even a decade later. Photo: Imaginechina.
Zheng Yangpengin Beijing

Suzhou, a city near Shanghai of interlocking canals and waterways, has tightened its real estate regulations for the fourth time this year, as the city’s overheating home market defied policies to bring affordability within reach.

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The local government doubled the tax return period in the city – an eligibility criterion for immigrant buyers of Suzhou’s homes – to two years, and broadened its jurisdiction to the entire city, including the Kunshan and Taicang counties, according to a Wednesday announcement.

The bout of restrictions comes ahead of a meeting - typically at the end of July - by the Communist Party’s all-powerful political bureau, or Politburo, which is expected to set the tone for the country’s property industry. As recently as May, local authorities had restricted land auction, banned reselling and capped prices in a bout of tightening measures to cool prices.

“The tightening policy in Suzhou certainly does not bode well for the Politburo’s stance on the property sector,” said the CCB International Holdings’ analyst Siu Fung Lung. “The policy is shifting toward a hawkish stance, from the more lenient statement of stabilising home, land price and market expectation in early 2019.”

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The prices of new residential property at the Suzhou Industrial Park – the district with the best jobs, most schools and most expensive homes – jumped by 8.6 per cent in the first half to 36,212 yuan (US$5,270) per square metre, almost as expensive as Shanghai, a metropolis double its size. In Xiangcheng district, prices soared by 22.7 per cent during the period, according to E-house data.

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