Business / Industries

New measures to curb real estate speculation

By Zheng Xin (China Daily) Updated: 2016-03-29 07:49

New regulations to cool the home market in first-tier Chinese cities will curb speculation for home purchasing and better regulate property sales and investment, according to a leading analyst.

On Friday, Shanghai and Shenzhen issued a series of policies, including raising down payment requirements for second-home buyers.

"These measures will definitely stop real estate-prices from rising and capping the overall volume of the market, which-has started to soar," said Guo Yi, marketing director at the Yahao Real Estate Selling and Consulting Solution Agency in Beijing.

"The policies will simply prevent many potential home purchasers from buying, with the increased minimum down payment required and stricter rules for residents."

Nonlocal buyers must also prove they have paid income tax and social security premiums in the city for five consecutive years-up from two years previously.

In Shenzhen, Guangdong province, the municipal government issued similar policies on Friday.

In a statement, it said people who buy a first home but who have taken out a mortgage over the past two years or who already own one home but have paid off their mortgage must make a minimum down payment of 40 percent, up from 30 percent, when applying for home loans.

Nonlocal buyers must have paid income tax and social security premiums for three consecutive years, up from one year previously, if they want to buy a house.

Shenzhen authorities have also ordered stronger measures to guard against financial risks in the property sector.

The city's government has banned financial institutions, including Internet finance companies and firms offering small home loans, from offering margin lending to homebuyers-where lending institutions allow individuals to borrow money for the purposes of investing it.

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