Shanghai has reaffirmed its commitment to real estate curbs in an apparent attempt to dismiss expectations that China’s commercial hub will ease some restrictions on property purchases.

The official Shanghai Securities News reported last week that non-local residents of Shanghai would qualify to buy second homes once they have held residence in the city for three years.

The news was interpreted by some as a sign of Shanghai starting to ease curbs on the real estate sector, spurring a rally in property shares.

The Shanghai government said in a statement late on Tuesday that it would stick to existing real estate policies, clarifying that only Shanghai residents qualify to buy second homes.

The Chinese property sector has been a prime target in Beijing’s fight against soaring inflation. Data over the weekend showed China’s home prices fell in January from December, the fourth monthly fall in a row, indicating the policy-driven property market downturn was deepening.

Despite Beijing showing its willingness to ease policy selectively to bolster growth, rhetoric has been resolutely tight-fisted on the property sector.

Shanghai is the latest city to reaffirm its real estate policies or backtrack from easing measures.

Local media reported that the third-tier Chinese city of Wuhu in Anhui province had suspended plans to ease property restrictions last week after they were slammed by experts.

Reuters News (Feb 29)