Following the abolition of the “blue-stamp” household registration, Tianjin's (property) market has drawn attention. Media recently learned from the Binhai New Area housing fair press conference that to promote the development of the Binhai New Area property market, Binhai will implement differentiated purchase restrictions, allowing anyone without property within the Binhai area to buy a home in the new area; it will also launch a shared-ownership home-purchase policy under which buyers can move in after paying just a 10% down payment.

 

　　Clearly, this significantly widens the opening in the “purchase restrictions.” Zhang Dawei, chief analyst at Centaline Property, believes the abolition of the blue-stamp household registration means Tianjin will basically lose at least 20% of its customers, a very large shock to the market. Local governments are also heavily dependent on land finance, so after Tianjin abolished the blue-stamp household registration, suburban counties need other policies to stimulate the market.

 

　　Just after the “blue-stamp abolition” policy was announced, a residential construction land parcel in Xiazhuang, Wuqing District, Tianjin, “fell through” because no one bid. Meanwhile, some local projects on sale, including Evergrande Shanshui City, Poly Xiangsong Lake and Shouchuang International Peninsula, have recently planned discount promotions. Some industry insiders believe the market is already voting with its feet.

 

　　Yan Yuejin, a researcher at the Shanghai (property) E-House Research Institute, said the cancellation of purchase restrictions in Binhai New Area is related to its overly large scale of development. Binhai New Area had previously frequently been hit by negative phenomena such as ghost cities. Behind this is, on the one hand, population inflow slower than expected, and on the other, overly large-scale project development. ”A local Tianjin resident once told a Xinhua Net reporter that after the State Council approved the “merger of three districts” in Tianjin in 2009, housing prices in Binhai New Area kept rising. “I remember not long after the announcement, housing prices in Binhai New Area exceeded 10,000 yuan per square meter. After that, projects sprang up everywhere.”

 

　　Data from the CRIC database show that 39 land parcels were transacted in Binhai New Area in 2009, increasing year by year over the following three years: 59 in 2010, 62 in 2011 and 61 in 2012. Only in 2013 did the figure decline, to 40.

 

　　Yan Yuejin believes that looking at the scale of land transfers in Binhai New Area, it is clear that under the impact of property market regulation in 2011, such large-volume land could not be absorbed in a timely manner in the subsequent market, which tends to show up as inventory buildup and in turn pressures local governments to exercise restraint in the land transfer market. The cold wave of price cuts in 2014 will also add some worry to the absorption of the land market in such areas.

 

　　However, in Zhang Dawei's view, the shared-ownership housing model in Tianjin's Binhai is equivalent to lowering the down payment to 10%, which conflicts with the central bank's policy on home purchase loans, and the likelihood of final implementation is expected to be very low. In addition, purchase restriction policies significantly curb investment and speculative demand, and it is currently difficult to fully relax them nationwide.