Hainan’s Capital City Relaxes Limits on Housing Purchases

Haikou, the capital city of South China’s Hainan province that has the strictest home purchase limits since 2018, is now loosening restrictions, following measures by the country’s largest cities to bolster the property market.

Haikou’s housing authorities held a meeting Monday, informing developers of the policy changes which include scrapping home purchase limits for divorced people and cancelling restrictions on the purchase of residential property by companies, several local people confirmed with Caixin.

A person close to local government said that Sanya, a resort city in Hainan province, is also preparing new policies to relax home purchase restrictions.

With warm weather and rich tourism resources, Hainan has attracted flocks of out-of-province home buyers, especially from northern regions, who have bought holiday homes. In the first half of 2017, about 88% of the homes sold in Hainan were bought by buyers from outside the province, according to a report by Lianjia Research Institute.

In April 2018, the Hainan government announced measures to restrict the purchase of homes by non-locals. People without a local housing registration, known as “hukou,” cannot buy homes in the island unless they have been registered in a social security fund for 24 months, and 60 months if they want to buy properties in the more upmarket areas of Haikou, Sanya and Qionghai.

With a nationwide property slump, home sales in Hainan last year dropped in value to 40% of 2017 levels, and to less than 30% of 2017 levels in floor area.