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City hikes house mortgage loans
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SHANGHAI yesterday announced a set of rules aiming to slow down fast-rising home prices, but reactions from market watchers to the new policies have been mixed.
Shanghai joined Shenzhen in raising the minimum down payment to 70 percent for second-home buyers from the previous 60 percent, becoming the second major Chinese city this month to tighten mortgage policy.
That was quite an about-turn: When Shenzhen hiked the down payment exactly a week ago, the Shanghai headquarters of the central bank said Shanghai had “no immediate plan to change the existing 60 percent rule.”
The local housing authority said on its website yesterday that non-locals providing tax or social insurance certificate to prove their residence in Shanghai for an accumulative 24 months over the past three years will be entitled to buy one property.
The previous rule demanded that they should prove their residence for an accumulative 12 months over the past two years in order to buy a property.
Moreover, the local government said land supply for residential development will have risen 30 percent by the end of this year compared with normal years. At least 1,000 hectares of land has been earmarked for housing development in 2013.
In particular, more land plots designated for small- and medium-sized apartments should be introduced to increase home supply for first-time buyers.
“Most of the new measures seem to be repetitions of existing curbs, and only two of them are new — a 70 percent down payment for second-home buyers and a higher threshold for non-local families to qualify for home purchase,” Yang Hongxu, vice director at E-House China R&D Institute, a property service provider and research body, wrote on his blog.
“With these measures, I don’t really expect the city’s overheated housing market to cool down immediately. They will more likely leave some psychological, rather than real, impact on home seekers,” he wrote.
Demand from locals who want to upgrade their houses, and from non-locals who plan to buy their first home in Shanghai, might be affected a little by new policies, Yang added.
Zhang Hongwei, a researcher with Tospur, a Shanghai-based real estate consultancy service provider, shared a similar view.
“The two new measures introduced this time by the local government are not supposed to be long-lasting policies in my perspective and therefore they may have more ‘political’ meaning instead of real influence over the city’s red-hot housing market,” Zhang said.
“As we know, for instance, a significant proportion of second-home buyers in the city pay in cash to buy their property.”
The ever-accelerating pace of home price gains registered across the country, particularly in gateway cities, has prompted Shenzhen, Beijing, and now Shanghai, to implement a new round of tightening policies as they strive to fight against soaring property prices.
In October, home prices in China extended their momentum for the 17th straight month and more notably, at an even faster pace.
The average price of new houses in 100 cities across the country increased 1.24 percent from September to 10,685 yuan (US$1,752) per square meter, the China Index Academy said last week. That compared to a growth of 1.07 percent in September and 0.92 percent in August.
In the 10 largest cities, the average price of a new home climbed 1.95 percent, compared to a month-on-month growth of 1.72 percent in September.
Among the 10 cities, Shenzhen saw the largest increase with a monthly rise of 2.83 percent, followed by a 2.56 percent growth in Beijing and a 2.35 percent rise in Shanghai, the academy said.
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