Shenzhen has slapped on more property purchase curbs as first-tier mainland Chinese cities show no sign of easing controls on the sector despite Beijing’s shift towards a more vigorous fiscal policy to boost growth. The new measures announced on Tuesday to target property speculators included restricting property owners to sell their flats for three years after purchase, banning purchases by companies and organisations to plug a loophole to skirt current restrictions, and tightening loan policy for divorcees of less than two years amid a growing number of people using a divorce to secure more loans. Last week, major banks in Shenzhen raised their mortgage rates for first-time homebuyers to 15 per cent from 10 per cent, even as the central government said the national campaign to reduce leverage would continue at a measured pace. The Shanghai mayor also stressed last week that the city has no intention to lift existing buying and mortgage curbs. Beijing reiterated that buying and selling restrictions on quasi-residential properties – flats built on commercial land with a shorter 40 to 50 year lease term – will not be relaxed. “Previous easing cycles have always included stimulating the property market, as investment in the sector is an important driver of China’s economy. But there’s no mention in this cycle, and the pace for redevelopment projects is also controlled. I think China will avoid the old path of using a property bubble to boost economic growth,” said Jiang Chao, chief economist with Haitong Securities. China’s central bank preparing further policy easing to counter credit squeeze With the increase in home prices gathering pace this year, Gavekal Dragonomics analyst Rosealea Yao said Beijing was becoming more concerned about overheating, resulting in tighter local housing policies, even though the central government is more concerned with the [overall] economic growth. In a communique on Tuesday after the Communist Party Politburo meeting, authorities said while growth and stability would underscore the nation’s economic policies in the second half, they remained firm on curbing home price increases. I think China will avoid the old path of using a property bubble to boost economic growth Jiang Chao, Haitong Securities Shenzhen property market, like those in other first-tier Chinese cities, has cooled in the past two years after a series of restrictions that have been implemented since 2016. Average new home prices dipped for 21 months to 54,111 yuan (US$7,957) per square metre in June. The secondary market, which accounts for 70 per cent of the city’s total transactions, remains lacklustre: average price in July fell 0.6 per cent from a year ago, according to Shenzhen-based property brokerage Midland Holdings. “This is a patchwork move, a continuation of existing curbs aimed at stemming speculators,” said Midland’s chief analyst He Qianru of the latest measures. Shenzhen new home prices little changed for 18-straight month She said some speculators had taken advantage of the policy loopholes in the past few months to buy new properties – priced lower than surrounding second-hand homes due to the government price cap – in the name of companies or using a divorce to pay a lower down payment.