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1st LD-Writethru: Shenzhen moves to stabilize property market

Xinhua, October 4, 2016 Adjust font size:

Shenzhen on Tuesday rolled out a spate of measures, including higher down payments and purchase restrictions, in its latest attempt to stabilize the red-hot property market.

Shenzhen became the 10th major city around China to clamp down on property speculation in about one week, following cities like Beijing, Tianjin, Hefei and Suzhou that have all seen home prices skyrocketing during the past more than one year.

Liu Hongyu, head of the real estate research institute of Tsinghua University, said the loan and purchase restrictions could help restrain speculative demand while increase in land supply could bridge the supply-demand imbalance.

First-time homebuyers who have no mortgage records in Shenzhen will continue to pay a minimum down payment of 30 percent. But the down payment for those who have mortgage records but no homes is raised to no less than 50 percent and that for second home purchases will be no less than 70 percent, the municipal government said in a circular.

Meanwhile, purchase restrictions were upgraded to rein in speculation in the southern Chinese booming city where prices of some homes have more than doubled since 2015.

People without a local hukou (household registration certificate) are allowed to buy only one house if they have paid five or more years of personal income tax or social insurance. The earlier minimum requirement is three years.

For those who have hukou certificates, a family continues to be banned from buying a third home and a single adult is banned from buying a second home.

The municipal government also said it will increase land supply in the coming years. It aims to have 800 hectares of land for housing development in the five years to 2020.

In some land sales, developers need to have plans for construction of some low-cost houses for rent or sale to win the auctions.

Also it ordered property developers to build more smaller homes: 70 percent of the total floor area of a real estate project shall be apartments smaller than 90 square meters.

The authorities also ordered enhanced market monitoring and crackdown on market activities that violate rules and laws. Endi