THE government warned property speculators against holding false hopes for a price rally in a Xinhua report that said authorities would not loosen curbs on home purchases to spur investment even as the economy slows.

Since 2016, authorities have introduced various tightening measures to rein in prices in hundreds of Chinese cities, including restricting multiple home purchases and raising the bar for mortgage lending.

While property price gains have become more modest, the overall market proved relatively resilient, as many investors exploited regulatory loopholes and turned to smaller and less-restricted cities.

Optimism has also been high as they bet on local governments’ reluctance to trigger a market correction, as municipalities heavily rely on revenue from real estate. “Speculative buyers, land revenue addicts, and even the entire society need to recognize the general trend and lose the illusion that the regulation will be relaxed due to the downward pressure on the economy, that there will be a ‘re-ignition’ of house prices,” Xinhua said.

Some banks, including China Minsheng Banking Corp.’s branches in Beijing and Shenzhen, and the branches of HSBC and Pingan Bank in Hangzhou, have recently lowered mortgage interest rates by 5 to 10 basis points for first-time property buyers, according to Li Weiyi, a mortgage analyst with Rong360.com, a mobile financing platform which tracks bank lending data.

Xinhua described recent market speculations that the government would relax regulation on residential real estate as “noise.”

The Xinhua report said a “long-term mechanism” — including the potential introduction of a nationwide property tax — is being studied, and existing administrative controls would not be abandoned halfway.(SD-Agencies)