Purchase restriction order
Purchase restriction order (限购令) refers to the policy issued by local governments in China’s major cities, including Beijing, Shanghai and Guangzhou, to curb the overheating real estate market by imposing restrictions on purchasing power.
Beijing was the first city to carry out the purchase restriction order. According to the city’s latest regulation, only those with Beijing hukou (household registration), or those who can prove they have worked in the city for five consecutive years are eligible to purchase property. Effective proof is either tax receipts or social security records. Those who have Beijing hukou can own a maximum of two houses in their names, while those relying on work history in the city can buy one house. The city forbids companies to purchase houses.
Big cities like Shanghai and Guangzhou have also implemented policies to counter skyrocketing housing prices. According to the two city governments, banks won’t provide loans for those who attempt to purchase a third house. As of Feb. 19, 23 cities had tightened their house-purchasing policies.
Housing prices continued to rise in 2010 despite government efforts to cool the market. In Haikou, the capital of southern Hainan Province, home sales prices rose 65 percent from the previous year. The prices soared after the government decided to develop the city into an international tourist resort.
In Beijing, the purchase restriction order is not only for the real estate market, but also places limitations on automobile sales through a license-plate lottery. The government intends for the policy to ease the city’s heavy traffic.
The purchase restriction order has stirred public debate. According to ChinaNews, some residents in Zhengzhou believe the policies are too mild to rein in rising housing prices.