Home-buying curbs to continue in China's top-tier cities and the real estate sector will continue to feel the effects and will remain overstocked, Valerie Tan of Channel News Asia reports.
In order to be allowed to own more than one home in Shanghai, it is required to first secure a Shanghai hukou, or household registration.
Mr. Yuan Hui, a resident of Shanghai, was interviewed by the new network where he expressed his interest to buy a second home for his family of five who currently has to share a sixty-square-meter apartment. Mr. Yuan said that getting a second home would give his family members more personal space.
"This way (my) children can have rooms to do their own self-studies. An elderly person may have differences so it is better to live apart. So I would need two small houses, not one big apartment," Mr. Yuan said.
Shanghai's current population is 24 million, and 40 percent of that is migrant workers like Mr. Yuan.
For analysts, home-buying curbs will continue to exist in China's top tier cities given that it is part of the government's measures to address the population growth, causing the real estate sector to be overstocked.
Looking at the inventory of first tier cities like Shanghai for October, for every one unit sold, there are nine left on the shelf. At the end of October, there was a 17% increase in the number of unsold homes, hitting a record of 686 million square meters across the country.
"The rate of urbanisation is at 55 per cent but the rate of urbanisation with second-home permits is only 30 per cent. Resolving this difference is the next important step to clear housing inventory," says Mr. Chen Yanbin of SoulFun.com.
"Big cities will control population flow. Smaller towns should liberalise residency permits. Small and medium cities should relax the thresholds," Mr Chen added.
