China initiates new curbs on property speculation

KUALA LUMPUR: China’s central policymakers issued a notice on Saturday April 17 allowing banks to suspend credit home buyers intending to acquire their third home or more, the Shanghai Daily reported.

According to a news report on Sunday April 18, the curb on credit focuses on residential properties in places where real estate prices rise rapidly and where home supply is insufficient.

Banks would also be asked to stop offering loans to those who have yet to pay their personal income tax or social security funds in the past 12 months

According to the news report, local lawmakers can also limit the number of houses a buyer can own, especially, those who already own many homes, and non-local buyers. Both group's are regarded as speculators they do not live in the properties they purchase.

Shanghai Centaline Property Consultants Ltd manager Ma Ji, was quoted as saying homebuyers from other parts of the country have been growing rapidly over the past six months, and outnumbered local buyers, based on Centaline records.  

"The latest notice has further reflected government determination to crack down on property speculators from outside a city," Ma said.

Home prices in China have gone up so much with no sign of easing anytime soon, making property prices in the world's third largest economy less affordable for the general public.

This has led the central government to initiate tighter credit policies and more tax levies to deter speculators from driving property prices higher.

Policymakers in China had indicated last week that second-home buyers seeking credit must fork out at least a 50% downpayment, up from the previous 40%.

According to the National Bureau of Statistics, China’s urban property prices rose 11.7% in March, the biggest annual gain since July 2005.

In Shanghai alone, average new home prices came to 19,767 yuan (RM9,312) a square meter in March while existing property prices climbed to a record 16,200 yuan per square meter in the same period.