June 5, 2018 / 9:12 AM / a year ago

China's Tianjin vows to fight property speculation despite growth woes

BEIJING, June 5 (Reuters) - China’s growth-starved city of Tianjin said on Tuesday it will increase scrutiny of home buyers and their eligibility, hitting back at criticism it was skirting curbs in place to fend off property speculators.

Tianjin, just 30 minutes southeast of the capital Beijing by high-speed train, has seen a sharp decline in real estate transactions due to restrictive policies drawn up to keep speculators at bay.

Despite a burgeoning high-tech industry, economic growth has slumped. Tianjin’s $290 billion economy - bigger than Vietnam’s - expanded just 1.9 percent in the first quarter, the worst among all of provincial-level regions.

Last month, the local government followed in the footsteps of tens of other Chinese cities when it relaxed residency requirements, allowing out-of-towners permits to live and purchase property in Tianjin, as long as they are below the age of 40 and hold a college degree.

“It’s the last straw to boost GDP in the short term,” said a user on Weibo, China’s equivalent of Twitter. “Is property the only way to develop Tianjin’s real economy?”

Critics say such policies to attract talent from other cities are undermining efforts to control property speculation and are artificially propping up prices. Cities such as Chengdu and Changsha have seen huge influxes in population.

Tianjin will closly monitor the eligibility of home buyers, said the Tianjin government in a statement on its website on Tuesday, without providing any other details.

It will also increase oversight of property developers and real estate agents, and crack down on any market behaviour that could cause “panic”.

The local government will also step up land supply, allocate land resources to develop the city’s home rental market and stabilise market expectations of property prices.

Average home prices in Tianjin rose 0.1 percent in April from March, compared with 0.5 percent growth nationwide, latest data from the National Bureau of Statistics showed. (Reporting by Stella Qiu and Ryan Woo Editing by Jacqueline Wong)

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