New housing restrictions aimed at further cooling

Updated 2016-11-30 11:07:21 Global Times

A new round of home-buying restrictions have been recently unveiled in China, which experts said shows the government's determination to cool the market and crack down on speculative purchases.

Late on Monday, the Shanghai Housing and Urban-Rural Development Commission announced that the down payment for a Shanghai resident's first home should be no less than 35 percent.

Shanghai residents who buy second homes for residential or investment purposes must make down payments of 50 percent and 70 percent, respectively.

Also on Monday, North China's Tianjin Municipality raised the minimum down payment for first-home buyers to 30 percent. For Tianjin residents' second homes for residential purposes, the down payment was increased to no less than 40 percent, according to Tianjin housing authorities.

Although the previous home-buying policies in these cities were quite strict, the markets have remained under pressure, experts said.

"Unbalanced supply and demand persists in Shanghai, and the expectation is for home prices in the city to keep rising. Therefore, guidance from the local government is needed to advance the stable development of the property market in Shanghai," Yan Yuejin, research director at the E-house China R&D Institute, told the Global Times on Tuesday.

Tianjin also raised the home purchase threshold by increasing the minimum down payment for first-home buyers from 20 percent to 30 percent, aiming to control speculative buying and guide the flow of credit, according to Yan.

Chen Juntao, an analyst at the market research firm Analysys International, said that, "China is committed to cutting housing inventory especially in third-tier and fourth-tier cities, and the property markets in first-tier cities like Beijing, Shanghai and Guangzhou in South China's Guangdong Province are [places] where the government will primarily tighten."

"The home price surge after this year's Spring Festival [in February] is still vivid in consumers' minds, and if the same thing happens again next year, there will be a market panic," Chen told the Global Times on Tuesday.

Experts said housing authorities in cities like Beijing and Guangzhou might roll out more market-cooling measures.

After the Beijing municipal government raised down payments for local second-home buyers in September, market conditions tightened.

For certain property projects in Beijing, local home buyers who once had mortgages but don't currently own homes are now classified as second-home buyers, the Beijing Business Today reported Tuesday, citing a housing developer.

The down payment for Beijing residents' second homes must be no less than 50 percent, according to the policy announced on September 30.

Under the previous policy, second-home buyers were only defined according to how many apartments were listed under their names, rather than by their mortgage records.

Local governments in more than 20 cities rolled out policies including higher down payment requirements and purchase restrictions since the National Day holidays [starting from October 1] to cool their overheated property markets.

Those markets include first-tier cities like Beijing and Shenzhen in Guangdong Province and smaller cities such as Suzhou in East China's Jiangsu Province.

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