Zhengzhou Scraps New Home Price Cap to Help Wake Up the Real Estate Market

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A residential project in Zhengzhou.

Zhengzhou has scrapped its last restrictive property policy, the price limit for new homes, as the capital of Henan province suffers a prolonged downturn in its property market.

The Zhengzhou Housing Security and Real Estate Administration Bureau said Wednesday it would no longer guide the sales prices of new commercial housing, letting developers set prices independently and manage pre-sale or sales licensing procedures.

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Zhengzhou lifted its price limit for new homes, ending a policy from 2016 aimed at curbing rising housing prices.
Developers now set prices independently amid a significant downturn in Zhengzhou's property market, with new home sales dropping 46% in the first half of 2024.
Despite loosening regulations, developers doubt a significant price recovery, citing a still-weak market and substantial unsold inventory.

AI generated, for reference only

What Happened When

September 2016：: Regulatory framework to curb rapidly rising housing prices set up in Zhengzhou.

July 2021：: Zhengzhou initiated the bulk buying of new homes from developers to transform them into affordable housing.

After July 2021：: The national property market cooled significantly.

Mid-2022：: Liquidity crisis in the real estate sector emerged, hitting Zhengzhou hard with many projects delayed or stopped.

Second half of 2023：: Property market regulations began to loosen, and price limit policies were gradually phased out in many cities.

First half of 2024：: Zhengzhou's new commercial residential sales fell by 46% in area and 49% in value year-on-year.

As of June 2024：: Zhengzhou’s new home inventory at a level where it will take about 30 months to sell, up from 20 months a year earlier.

2024-07-31：: Zhengzhou Housing Security and Real Estate Administration Bureau announced it would no longer guide the sales prices of new commercial housing.

AI generated, for reference only