December 26, 2019 / 4:47 AM / a month ago

China's Nantong city imposes five-year ban on resale of cheap homes to curb speculation

FILE PHOTO: Workers are seen on scaffolding at a construction site in Nantong, Jiangsu province, China January 1, 2019. Picture taken January 1, 2019. REUTERS/Stringer

BEIJING (Reuters) - The eastern Chinese city of Nantong, with a population of more than 7 million, has introduced a new rule to ban near-term resale of certain cheap homes in the latest step by authorities in the country to curb property market speculation.

On Wednesday the government of Nantong, near Shanghai and a number of other port cities, said property buyers who have bought new homes at prices much lower than the market average are not allowed to resell their properties for five years.

China has clamped down on property speculation since 2016 to stop home prices from overheating. But with the pace of China’s economic growth slowing, policymakers are aware of the need to avoid wholesale squashing of the property market - a pillar for the broader economy.

Beijing has been calling instead for the adoption of city-based policies to ensure market stability. Analysts say any sharp drop in home prices would likely not be tolerated by local governments.

Reporting by Lusha Zhang and Ryan Woo; Editing by Kenneth Maxwell

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