New Regulations to Help Curb Speculations in the Housing Market
The city released new regulations that will help cool down the home market in first tier Chinese cities have curb speculations on home purchasing along with better regulation of property sales and investment. Recently Shenzhen and Shanghai issued policies that include raising the down payment requirements for all second home buyers. Experts hope that these measures will definitely stop real estate prices from rising and capped overall volume of the market which has started to soar.
These new policies simply prevent potential home buyers from buying using the increasing minimum down payment required and implement stricter rules for residents. Non local buyers should prove that they have already paid their income tax and social security premiums in the city for at least five years up from the two previous years. In Shenzhen the municipal government issued the same policies last Friday. Reports say that when people that bought their first homes but took out a mortgage over the past two years, or already own one home and paid off the mortgage, must make the minimum down payment of 40 percent when applying for an new home loan. Non local buyers should have paid their income tax along with the social security premiums for three straight years, up from one if they intend to buy another home.
Shenzhen authorities ordered the implementation of stronger measures that will guard against financial risks in the home property sector. Also the city government banned financial institutions and firms from offering small home loans and offering margin lending to home buyers, wherein these institutions allow individuals to borrow money to be used in investment purposes.