Chinese Cities Tighten Restrictions on Housing Purchases

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. reform / rɪˈfɔrm / (n) – an improvement in a system

    The citizens are demanding for reforms in the tax system.

  2. inflated / ɪnˈfleɪ tɪd / (adj) – inappropriately increased

    The sugar shortage led to inflated prices in sugar products.

  3. asset / ˈæs ɛt / (n) – an item that has a big value

    A lot of professionals are investing in assets such as real estate

  4. renovate / ˈrɛn əˌveɪt / (v) – to repair

    The company is planning to renovate some of its facilities.

  5. reside / rɪˈzaɪd / (v) – to live in a place

    We reside in the city.


Read the text below.

Several cities in China have implemented reforms on housing purchases.

Under these reforms, which were announced in October 2016, people without permanent residence permits must produce income tax records and social security payments if they plan to buy a house in Chinese cities. In Hangzhou / ˈhɑŋˈdʒoʊ /  and Shenzhen / ˈʃenˈdʒen /, people must present income tax records worth two years. In Qingdao / ˈtʃɪŋˈdaʊ /, they must show records worth a year.

Meanwhile, Nanjing / ˈnɑnˈdʒɪŋ / prohibits individuals without permanent residence permits from purchasing a property.  Likewise, those who already own at least two houses in main urban districts will no longer be allowed to purchase another house.

The reforms aim to slow down the increase in house prices. As people buy properties with the intent of selling them instead of living in them, house prices become more inflated. Knowing that a drastic increase in the price of these assets may result in losses for buyers, the Chinese government continues to develop reforms that will ensure a stable property market.

The reforms are expected to slow down the increase of house prices in the years to come. To ensure balance between supply and demand in the real estate market, the government was advised to use part of its earnings from property sales to buy residential spaces and rent them out. As the government aims to build around six million houses within the year, it will eventually renovate some urban areas, specifically those where underprivileged people reside.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you agree with the Chinese government’s decision to impose restrictions on housing purchases? Why or why not?
• Who are likely to be affected by these restrictions? Explain.

Discussion B

• Aside from property, what items can be considered as assets? Discuss.
• Would you invest in these assets? Why or why not?