(Yicai Global) Sept. 12 -- Xiongan New Area’s local government will not leave any room for speculative property purchases and will adopt a rental-purchase housing policy, an official told reporters at China’s state-run media outlets.
The region will run an innovative policy combining rental and for-sale properties, said Liu Baoling, deputy secretary of the local government’s party committee and executive deputy director for the new area’s administrative committee.
“Properties in Xiongan are built for living, not for investments,” Liu added. “They should meet the needs of various market groups and leave no room for speculation.”
Xiongan will never adopt the old city development model where the local government relies on land leasing and the real estate market to generate fiscal revenues, he continued. It will improve existing practices to create a good working and living environment for talented people of various industry backgrounds, especially young entrepreneurs.
For example, the government proposed to provide rental apartments for entrepreneurs and employees from other parts of the country to work in Xiongan, and tenants can buy the properties after they have rented for 10 years or more. However, there will be a lockup period after purchasing which prevents them from selling them soon after buying, and the government will have priority to buy the homes at a price slightly higher than the bank loan principle and interest for the period they have rented the home.
The region will also introduce a modern employment system to attract qualified professionals across the nation and the rest of the world, Liu added, saying that the goal is to bring in and retain talented people while allowing them full scope for personal development. All positions in the new area will be open to the public and the average wage will be similar to or even higher than that in Beijing, he said.
In early April this year, China’s central government decided to set up Xiongan New Area in Hebei province, close to Beijing. The initial area covers around 100 square kilometers and hopes to ease the non-capital functions of Beijing, adjust and optimize the urban layout and spatial structure of Beijing, Tianjin and Hebei, and cultivate innovation to become a new development engine.
After the plans were announced, a large number of speculators rushed to speculatively purchase properties, prompting the government to put a ban on real estate sales in the local market.