Hangzhou Lifts Secondary Market Home Purchase Limits Amid Real Estate Policy Reforms

Hangzhou, recognized as the fifth wealthiest city in China, has eliminated all home purchase restrictions in the secondary housing market. This significant policy shift is part of a broader move to invigorate the local real estate sector, aligning with recent "optimization and adjustment" trends seen after the legislative meetings, known as the two sessions, in Beijing.

In a bid to further stimulate market activity, the city has standardized the exemption period for value-added tax on personal property sales to two years. This change is expected to encourage more transactions by reducing the tax burden on sellers.

This development echoes similar reforms in other major Chinese cities. Guangzhou and Shanghai have already introduced comparable measures, signaling a nationwide initiative to stabilize and rejuvenate the property market amidst broader economic challenges.

Meanwhile, China's REIT market is showing signs of a robust recovery, buoyed by a resurgence in consumer spending and rental activity. SF REIT (2191) reported a 3.7 percent increase in distributable income, totaling HK$230 million in 2023. The total distribution to investors also climbed by 3.3 percent to 28.66 cents per fund unit, with the firm maintaining a solid 100 percent payout ratio.

Contributing to the positive financial results, SF REIT's total revenue saw a 5 percent increase to HK$444.9 million. This uptick is partly attributed to the full-year impact of a property in Changsha that was added to the company's portfolio in June 2022.

In another strategic move, China Resources Land (1109) has launched a REIT for its Qingdao shopping center. The newly formed CR Commercial REIT has made its debut on the Shenzhen Stock Exchange, successfully raising 6.98 billion yuan (HK$7.59 billion) through its initial offering. This indicates a growing confidence in the real estate investment trust model within China's commercial property sector.