Air appears to be escaping the property bubble. Photo: Reuters
Air appears to be escaping the property bubble. Photo: Reuters

The two-day property curb crackdown that occurred in eight Chinese cities on Friday and Saturday was designed to stabilize the market, analysts told Xinhua News Agency on Sunday.

The action occurred in cities such as Xi’an, Chongqing, Nanchang, Nanning, Changsha, Guiyang, Shijiazhuang and Wuhan, which are not considered red-hot communities for property buyers, the Xinhua report said.

The move by the authorities to put in a series of curbs in these Tier-2 cities suggests they are taking action where there is an “increase in property prices,” said one analyst.

These cities also have significant populations, which are creating more demand for properties, the report added, with the curbs being introduced to contain the latter demand.

According to housing statistics, Shijiazhuang, Nanchang and Nanning lead the country for new home prices in the month of September, while Changsha has seen an increase of 16.9% year on year in August for new residential prices — another likely reason for the introduction of curbs.

Likewise, the remaining cities all saw more than 10% growth in new residential prices in the month of August year on year, the report added.

The housing inventory in these cities is also decreasing, the report added, leading to possible pressure for the upwards movement of housing prices.

An analyst also told Xinhua that the curbs are likely to be spread to other cities across China, as the government looks to “buy time” to introduce more complete measures when the market is more stable.