Cities institute rules to keep HK speculators out of market

PUBLISHED : Wednesday, 27 October, 2010, 12:00am
UPDATED : Wednesday, 27 October, 2010, 12:00am

The prospect of a steadily rising yuan could lure an increasing number of Hong Kong buyers into the mainland property market. But they will find they are not welcome in a number of cities, including Fuzhou and Shenzhen in the south, Ningbo in the east, Guan, Xianghe and Yangjiao in Hebei province, and Beijing.

People who live in such cities but do not have a hukou, or residency status, may buy a single home if they can provide proof of having paid tax or contributed to a social security fund for one year, but they will not be allowed to make any additional home purchases, according to the new rules imposed in these cities.

The rule is among measures imposed in response to the central government's latest effort to restrain the red-hot property market.

On September 29, the central government suspended bank loans for third-home purchases effective from October 1, and said it planned to levy property taxes throughout the country. All buyers of first homes must now also make a down payment of at least 30 per cent of the purchase price under the new rules.

The central government said provincial and city governments should monitor whether prices were rising too quickly in their jurisdictions and, if so, put limits on the number of houses a family could buy.

At present, at least 14 cities have limited families with residency status to the purchase of one home.

Analysts expect home prices could drop as much as 20 per cent next year.

Residency required

The number of mainland cities limiting families to buying one home is: 14