Property policies

Shenzhen and Guangzhou announce new controls to dampen property price growth

Tightened mortgage down payment requirements of 70pc for second home buyers are among a raft of new measures designed to cool overheating housing markets

PUBLISHED : Tuesday, 04 October, 2016, 11:39pm
UPDATED : Wednesday, 05 October, 2016, 12:27am

The Shenzhen and Guangzhou municipal governments on Tuesday announced a raft of new measures aimed at dampening the soaring property market, including increasing minimum down payment requirements and a more stringent threshold for non-locals to purchase property in the city.

Under the latest measures, second home buyers in Shenzhen will have to make a 70 per cent down payment, an increase from the previous 40 per cent.

Non-local residents who wish to buy a new home in Shenzhen will only be eligible if they have made social security payments for the last five years, compared to the previous three-year requirements. This means that non-local residents must have worked in the city for a minimum of five years.

According to data by the National Bureau of Statistics property prices in Shenzhen have risen 36.8 per cent compared to a year ago.

In Guangzhou, non-local residents are allowed to purchase only one home and must show proof that they have been making social security payments or personal income tax for at least three years within the last five years.

Average new home prices among 70 major cities jumped 9.2 per cent in August compared to the same time last year, up from 7.9 per cent in July.

Shenzhen’s countermeasures are the latest in a string of Chinese cities which have also taken steps to cool the property market as the government attempts to dampen soaring prices stoked by property speculators.

According to state-run Xinhua news agency, The Ministry of Housing and Urban-Rural Development has investigated and punished 45 property developers and intermediaries for encouraging speculation via false advertising, the spreading of rumours and breaking presale rules.

On Monday, Chengdu, Jinan, Wuhan and Zhengzhou announced new restrictions on property purchases. Other cities including Tianjin, Hefei and Suzhou also recently rolled out countermeasures to limit purchases as property prices jump.

Additional reporting by Reuters