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Hukou plan impact seen long term

SHANGHAI'S newly-launched trial plan to make it easier to grant household registration, or hukou, to talented outsiders won't likely have an immediate impact on the city's housing market, although it will be quite positive in the long run, industry analysts said yesterday.

"The new policy, aimed to lure more talented people from other parts of the country to the city, will surely have a very positive influence on the local market as it will finally boost demand for homes," said Ma Ji, head of research at Shanghai Centaline Property Consultants Ltd. "However, that is rather a long-term impact, and we don't expect it to shore up home sales immediately."

The city government revealed on Monday on its official Website some of the details of the three-year trial scheme which aims to "greatly enlarge" the number of people who will be allowed to become permanent Shanghai residents. Shanghai becomes the first big city in the country to ease its previously rigid hukou system.

"To newcomers, a hukou will definitely give them a true sense of belonging as they can enjoy the same social benefits as locals," said Xue Jianxiong, an analyst with E-House (China) Holdings Ltd. "And for most Chinese people, the ultimate way to put down their roots in a city will be owning a house of their own."

But the incentive is expected to play a very limited role to stimulate the property market, Xue said.

A latest survey conducted by a real estate industry Website,, found only 15 percent of respondents said they expected an immediate impact from the new policy on the local housing market whereas 64 percent said a relaxation on permanent residency won't affect their current home purchase plan.

In the long term, analysts said apartments in remote areas, such as those in residential communities near the Outer Ring Road, may be most sought after by the newcomers.


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