Xinhua News Agency reported that many Chinese cities rolled out policies to tackle sharp housing price rises in the past week. A total of 19 Chinese cities have rolled out specific policies to curb speculative housing purchases from Sept. 30 to Oct. 6. Insiders believe that policies on housing purchases will be tighter and the turnover in October may decline.
Despite the different policies on housing purchases in different policies, the core content of the policies is to restrict purchases and loans:
—Purchase restrictions. Of the cities introduced new policies, many reinitiated or expanded purchase restrictions. Hefei and Nanjing released stricter purchase restriction policies. Local residents are prohibited to purchase the third new house (in areas with active trading). Wujiang District, Kunshan City and Taicang City are covered by purchase restriction policies released by Suzhou City.
—Loan restrictions. Many policies raised the down payment for second houses to 40 to 50 percent. Suzhou prohibited the purchase of a third house and raised the down payment for the second house to 80 percent. Beijing further expanded the coverage of second houses.
A professor from Xiamen University believes that to some extent, the crazy market is closely associated with the high leverage. The purchase restrictions, land policies and loan restrictions are typical measures in de-leveraging in the supply and demand.
Insiders believe that most of the cities are second-tier cities with higher housing price rises. It is expected that more cities will roll out restriction policies in the future.
“It is expected that more cities will introduce stricter policies in the future and it will see changes in policies on houses purchases,” indicated Zhang Dawei, chief analyst from Centaline Property. The policies will tighten the restrictions on the qualification of non local buyers. It means that the regulation on the housing price has expanded from first-tier cities to second-tier cities. It is expected that the surging property market will cool down in Beijing and other first-tier cities.
Some insiders believe that the turnover in the property market may decline in the future. “It is likely that the turnover in the fourth quarter will decline. The turnover in October, another golden month for the property market after September, will plunge.” Zhang expected that the house price will continue surging boosted by the high land price. The house price will keep relatively stable after the introduction of the policies and the price rise may slow down.
However, some analysts believe that despite the booming property market in some cities, some still face de-stock pressures and may release loose policies.
Translated by Star Zhang
Latest comments