MNI: China Not Cutting Home Purchase Subsidies In All Cities

     BEIJING (MNI) - Planned reductions in subsidies to enable low-income

Chinese city dwellers to purchase new homes will not be implemented in all

cities, a senior housing official said on Thursday, amid concern over the move's

impact on property investment.

     The "adjustments to policy incentives" will depend on the situations of

different urban areas, Ni Hong, vice minister of Housing and Urban-Rural

Development, told reporters in Beijing on Thursday.

     Ni spoke to the press after the State Council on Monday called for

"optimizing and adjusting" subsidies added to the government's decade-old

shantytown renovation project in 2014, and urged authorities in cities with low

housing inventory and fast-rising property prices to halt payments to home

buyers altogether.

     Housing ministry officials have been concerned the subsidies were helping

to stoke property price bubbles, especially in provincial capitals and other

so-called third and fourth-tier cities, since as early as 2017, according to a

report by the 21 Century Business Herald newspaper.

     The central government's announcement this week made it clear the cash

compensation will be phased out in cities already experiencing rapid gains in

property prices, the newspaper said, citing analysts.

     The shift in policies will further reduce investment in property, the

Herald cited Huatai Futures as saying.

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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