Shanghai eases restrictions on real estate purchases.

Shanghai relaxes restrictions on real estate purchases.

Amid the turmoil in China’s real estate market, Shanghai, its largest city and economic center, has relaxed property purchase rules. Prospective home buyers can now only live in Shanghai for three years, instead of the previous five.

The Shanghai authorities made this change to revive the sector, which had stalled due to the stringent lending policy introduced in 2020. The main reason for these restrictions was the huge debt accumulation in the construction industry resulting from speculative purchases during the construction boom. These actions were aimed at limiting speculation on the real estate market in the metropolis with a population of 25 million.

Nevertheless, major players such as Evergrande and Country Garden are struggling with these constraints. The construction crisis is currently considered a significant threat to the Chinese economy. In mid-May, the government in Beijing proposed radical measures to solve the problem, including the purchase of unsold apartments by public institutions and streamlining lending guidelines for private property buyers.

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Source: www.ntv.de