Wuhan Introduces ‘Housing Ticket’ to Cool Surging Property Prices

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China has taken countless measures over the years to cool the red-hot property market. It has introduced ceilings on borrowings, limited the number of properties that an individual can own and even increased interest rates on mortgage loans. In the latest bid, the government has borrowed a page from its old playbook of ration coupons, a strategy that was used during the country’s planned economy era, to rein in the property market. The housing authorities in Wuhan, the capital of central Hubei province, last week proposed a screening system to make sure real buyers qualify to buy a flat. Under this plan, only applicants who have been issued a “home ticket” can register to buy property and that too in only one residential project. The Wuhan Housing Security and Management Bureau said that, “Any investor who tries to cheat or circumvent the ticketing system would be blacklisted and banned from buying a home for one year. The proposal is currently under public consultation until Friday.” “The procedures to scrutinise home seekers’ qualifications have been rolled out in many cities, but a ‘home ticket’ system has been adopted for the first time,” said Yan Yuejin, director of Shanghai-based E-house China Research and Development Institute. “The ticket is another way to further screen out property speculators and stabilise people’s expectation on home prices.” The Wuhan authorities’ move to implement a ticket-qualification system is reminiscent of the food ration coupons known as liangpiao in Chinese. The coupons were issued by the government during the planned economy era to make sure every household got some supplies when food and other commodities were scarce. The government introduced the ration system in 1955, and coupons were issued for food, fuel, bicycles and televisions. Without them, Chinese residents were not permitted to purchase the goods. With the country’s reform and opening up, food and commodity supplies quickly caught up and even surpassed demand. Ration coupons were gradually withdrawn and abolished in the 1990s. Analysts said that both the ration coupons and home tickets can be seen as yet another market intervention from the government to control supply and demand, although for vastly different reasons.