SHANGHAI, July 20 (Reuters) - The city of Kaifeng in China’s Henan province has reversed a decision to ease restrictions on real estate transactions, it said in a statement on Saturday, after admitting it had failed to assess the full market impact of the move.
Friday reports said the mid-tier city of 5 million people was seeking to stimulate its property market by cancelling a 2017 rule that forced buyers to retain new homes for at least three years before they were eligible to resell.
“The Municipal Housing and Construction Bureau ... had not carried out sufficient market research and investigation and lacked a full forecast and assessment of its possible market impact,” the city said in the statement.
Many Chinese cities are looking to rejuvenate a sluggish property market while at the same time curbing price bubbles.
Average new home prices in 70 major cities grew 0.5% in June from a month earlier, easing from 0.7% in May.
Real estate analysts are bearish about the market this year with demand in smaller cities - which account for 70% of sales by floor area - expected to falter because of restrictions.
Chinese real estate investment grew 10.9% year on year in the first half of 2019, while property sales by floor area fell 1.8% compared to a year earlier. (Reporting by David Stanway and Lusha Zhang; Editing by Himani Sarkar)