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Beijing tightens regulation on property market as prices rebound

Residential buildings are seen along a street in Hefei, Anhui province, China, February 19, 2017. Picture taken February 19, 2017. Photo: Yawen Chen/REUTERS

The Beijing authorities announced new measures on Friday to further cool the housing market by raising the down payment requirement for second home purchases in the city to 60 to 80 percent from 50 percent.

The new regulation comes into effect on Saturday, according to the announcement released on the website of the Beijing Municipal Commission of Housing And Urban-Rural Development.

The commission also changed the definition of a “second house buyer” to anyone who has a record of taking a mortgage in the city, even if they are not currently holding the mortgage, which means the higher down payment requirement will apply to more people.

Beijing also suspended issuance of individual mortgage loans for terms of longer than 25 years, the notice said, while the down payment for those who are qualified to buy a first house in the capital remains at not less than 35 percent.

The new regulation came as the second-hand home prices grew at a faster pace recently, the housing commission said in the announcement.

Last September, the city had rolled out regulations to restrict home purchases, amid a nationwide effort to cool the over-heated housing market, by raising the down payment for a second house to at least 50 percent and the first house to at least 35 percent.

“While the measures taken to regulate the housing market in September have been effective, and the monthly rise in second-hand house prices has clearly slowed, it is still increasing, in particular in the past month,” said the commission on its website.

The National Bureau of Statistics (NBS) said on Saturday that the second-hand house prices for Beijing in February increased by 1.3% compared with that in January, and were up 32.2% on year.

Friday’s announcement also came right after the closing of China’s annual parliament last week, during which the country’s policymakers have vowed to keep the property market stable and stem speculation this year.

“We need to be clear that house is for people to live in, and local governments should take primary responsibility in this respect,” said Chinese Premier Li Keqiang during the opening of the fifth annual session of the 12th National People’s Congress on March 5 in Beijing.

“We should move faster to establish robust long-term mechanisms for promoting the steady and sound development of the real estate sector …., and keep home prices from rising too quickly in popular cities,” he said.

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