GUANGZHOU, May 18 (Xinhua) -- At least six cities in China have loosened controls over the property market and more are expected to do the same as local governments are worried that sluggish home sales may drag on the economy.
Zhang Dawei, chief analyst with Centaline, a leading property agent in China, told Xinhua on Sunday that policies once aimed at curbing excessive growth of the property market appear to be loosening across China.
"More than 30 cities nationwide are expected to loosen controls on the property market as the market will continue cooling in the near future," said Zhang.
China's property market has been booming since 2003, and the government has been trying to rein things in by rolling out measures such as home purchase restrictions. After a decade of rapid growth, the overheated market has started to cool in 2014.
According to the National Bureau of Statistics, the growth of new housing starts, a leading indicator of property investment, fell 27.2 percent year on year in the first quarter, while sales in residential areas contracted by 5.7 percent.
The slowdown has already taken a toll on local governments' fiscal revenues. Statistics released by the Ministry of Finance on Monday showed taxes related to the property market were contributing less to the growth of local fiscal revenue, with business tax for real estate down by 4.2 percent in April.
"In one to two years, this will have a tremendous negative effect on real estate investment and local governments' infrastructure investment, which relies heavily on revenue from the real estate sector," said Chen Wenzhao, an analyst with China Merchants Securities.
"The outlook for a housing price drop will affect people's willingness to buy properties, pressing economic growth to slow down," he added.