Foreigners will only be allowed to buy one apartment on China's mainland, under new rules announced by the government as it seeks to curb property speculation.

Overseas buyers must provide statements to show that they don't own other properties on the Chinese mainland, along with proof of at least one year's employment here before home purchases, the Securities Times reported yesterday.

It cited a statement issued jointly by the Ministry of Housing and Urban-Rural Development and the State Administration of Foreign Exchange.

Overseas companies, meanwhile, can only buy non-residential properties in cities where they are registered, according to the newspaper, which didn't say when this policy would begin.

'Most stringent'

"The new policy, the most stringent on property purchases by foreigners so far in China, is in line with the country's latest tightening measures to rein in property speculation," said Yang Hongxu, an analyst with Shanghai-based E-house China Research and Development Institute.

"The restriction is obviously aimed at curbing the inflow of speculative foreign capital."

Previously, overseas people studying and working in China's mainland for at least one year were allowed to buy properties for their own use. This was announced by the central government in July 2006, without limiting the number of homes they could purchase on the mainland.

China's urban property prices climbed 8.6 percent in October, extending year-on-year gains for 17 months in a row, the National Statistics Bureau said this week.

Real estate prices in 70 major Chinese cities grew fastest in April - up 12.8 percent.

In mid-April, China launched its toughest-ever tightening measures to rein in property speculation.

These included increased down payments and interest rates for both first and second homes and a ban on mortgages for third or more homes.

Several cities, including Beijing and Shanghai, also capped for the first time the number of homes a family can purchase.

However, analysts said while the latest measures to restrict property purchases by overseas citizens showed the central government's firm stance, they may have limited impact.

"Our research has found that between January and October, in Shanghai's existing home market, overseas home buyers, including those from Hong Kong, Macau and Taiwan, only accounted for 1.64 percent of the total purchase deals," said Song Huiyong, research director of Shanghai Centaline Property Consultants Ltd, operator of the city's largest estate chain.

"As far as I can see, the new policy will only serve as a clear notice showing the government's resolution to rein in property speculation, rather than having any significant impact on the country's property market," Song said.

(Shanghai Daily November 13, 2010)