Analysis | New tightened Shenzhen home rules to curb property bubble might hit Hong Kong buyers
Down payments are being raised for second home purchases and non-local buyers will be required to pay social security for three years
A raft of new measures to dampen the hot Shenzhen property market is likely to make it harder for non-residents, including those from Hong Kong, to purchase a home there, but it remains unclear if the package will cool the market, analysts say.
The Shenzhen municipal government announced the new rules late on Friday. They included higher mortgage down payments and a more stringent threshold for home purchases by non-locals. They came into immediate effect.
Shenzhen banks now require a 40 per cent down payment for purchasers of second homes if a first home loan is paid off, compared to the previous 30 per cent.
Officials also raised require- ments for non-local residents buying homes in Shenzhen. They are no longer eligible to buy a flat unless they have made social security payments for three years, which means they must have worked in the city for at least three years – up from the current one year.
The impact of the changes is unlikely to be great on Hong Kong. Centaline Group’s research centre in Shenzhen reported that in the past two years, about 4 per cent of all homes sold in Shenzhen were bought by Hongkongers. However, it said the ratio was significantly higher in areas closer to the border.