Hainan Province developers admit they are hurting, but Haikou housing officials denied reports they too are feeling the squeeze from a policy they announced in February that restricts housing purchases to certain types of local residents.
"We never said we'll cancel the policy," Dai Kaiquan, director of marketing management department of the provincial capital city's housing and urban construction bureau, told the Global Times on Tuesday. "We'll continue to hold back home buyers eying investment."
Dai's words served as a rebuff for a report by financial website eeo.com on Tuesday saying the authority had abandoned the house buying restrictions on outsiders due to plunging revenues.
Nationwide 24 cities and counties launched purchase limits in January after the State Council announced the national policy on limiting housing prices in the same month, financial news portal cnstock.com reported.
Only residents who already owned one apartment or non-locals with evidence they had paid local tax and social insurance for a year could buy homes, according to the policy.
"The policy has proven effective," Dai said. "It has controlled housing investment and the local economy has been steady in the first quarter."
The policy has slightly affected local finances, admitted Pang Gexin, head of the Haikou bureau of finance. Real estate revenues were 910 million yuan ($139.381 million) in the first quarter, down 17.8 percent over last year, accounting for 20.4 percent of total revenue, the Xinhua News Agency reported.

The policy doesn't include some commercial tourism housing projects such as property hotels, Dai said. "Real estate is still important in Hainan," he said.
A Haikou real estate company manager said he had suffered losses from the policy.
"Our company's income fell 50 percent compared to the same period last year," Wang Jing, a manager of Haikou branch of 5i5j.com, a leading housing agency in China, told the Global Times.
The home buyers in Hainan mostly used to be outsiders, he said. They are now confined by the new policy, he complained.
"Some housing agencies have had to close down their business," he said. "Although the price of housing has fallen about 4,000 yuan a square meter, few people buy."
Some outsiders could still buy apartments in Haikou, Wang said, but refused to give further information.
Huang Haiting, 32, a college teacher from Ningbo, Zhejiang Province, plans to buy an apartment in Haikou.
"Inflation is higher now. I should invest in housing to maintain the value of my cash," Huang told the Global Times on Tuesday. "I wish the purchase limit policy could be canceled."
The restrictions were "backward," Yin Kunhua, a real estate expert at Shanghai University of Finance and Economy, told the Global Times on Tuesday. "Housing purchases should be adjusted by the market not on the orders of the government.
"In an era with higher inflation, home buying is a wise way to invest. The real estate market shouldn't be so conservative."
SOURCE: globaltimes.cn


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