Sanya tightens rules on new mortgages for 3rd homes

Updated 2017-03-13 09:28:22 Global Times

The local government in Sanya, South China's Hainan Province, on Sunday announced rules to prohibit new loans on those buying more than two properties, a move intended to reduce volatility in the market.

The down payment rates for the first home are in line with the level set by the central government, according to a document released by the local government in Sanya on Saturday.

The interest rates for short-term and long-term loans for the first homes range from 2.75 percent to 4.90 percent, set by the People's Bank of China, the central bank, according to southmoney.com.

Rates for a second home must be at least 50 percent, and there are no loans at all for properties beyond that, the document showed.

The move aims to tackle speculation following the rapid rise of home prices in Sanya, Yan Yuejin, research director at E-house China R&D Institute, said in a research note sent to the Global Times on Sunday. “The average new home price in Sanya in January was 23,566 yuan (,407) per square meter, but the price in January 2016 was 19,169 yuan per square meter,” he noted.

Also, the document said that transfers of pre-sale homes will not be allowed anymore, which will effectively restrict speculative activities, according to Yan. “Some homebuyers eyed those pre-sale homes by making orders before signing any contracts, then they put those homes on sale to pocket profits in private deals,” he noted.

The new policy in Sanya reflects a general trend nationwide to curb speculation while stabilizing home prices, which other cities are likely to follow, Yan added.

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