Beijing is the first city to respond to the central government's efforts to restrain sizzling home prices by limiting families to purchases of only one new home.
Li Wenjie, head of Centaline Property Agency's Beijing office, said the measure was even tougher than that announced by the central government two weeks ago. 'The measure will cut home demand and, as a result, it will substantially hit sales volumes and prices,' Li said.
The Beijing city government yesterday announced 12 measures in the latest move to curb speculation in the red-hot property market. The most controversial is the temporary measure that says every homebuying family is only allowed to purchase one new unit. The 11 other rules closely adhere to those already rolled out by the State Council, including higher down payments and raised mortgage rates. The measure does not state if the one new home families are allowed to buy is in addition to however many they may own now.
'I will read it as meaning that every family, no matter if you own a home already, is only allowed one new homebuying opportunity,' Li said. 'This will make more home-seekers take a wait-and-see attitude, causing home prices and volume to fall quickly. Other cities will follow suit and that will have a big impact on the overall market.' Mainland media said yesterday that Shenzhen's city government was due to announce tougher measures but no details were given.
Daily sales volumes of second-hand homes in some cities have reportedly fallen as much as 80 per cent from the peak in March following the government's announcement of the measures last month. But there have been no major price cuts, according to Andy Lee, head of Centaline's Shenzhen branch. Meanwhile, Alan Chiang Sheung-lai, head of the mainland residential department of property adviser DTZ, did not see the Beijing rules as being tougher measures.
The government's April 14 announcement did not ban commercial lenders from granting mortgages on second homes, but allowed for flexibility to reject second-home mortgage financing, he said.
