More Chinese Cities Tighten Home Purchase Regulations to Curb Prices – Reuters

BEIJING (Reuters) – An increasing number of Chinese cities are implementing stricter regulations on the purchase of second homes, which include higher downpayment requirements and additional tax measures, in an effort to control surging property prices.

In many areas, home prices have surged by over 20%, as the country’s real estate market rebounds sharply after a slow 2015.

Cities such as Nanjing, Suzhou, and Hefei, located in the affluent Yangtze Delta region near Shanghai, are now requiring a 50% downpayment for second home purchases if the buyer already has an existing mortgage, up from the previous minimum of 40%.

In Suzhou, a recent regulation mandates that non-residents wishing to buy a second home must provide proof of having paid local taxes and social insurance for a minimum of one year.

Hefei has introduced a requirement for a 40% downpayment for all second home purchases, along with several conditions for loan approvals, as reported by various media outlets.

The National Bureau of Statistics reveals that in July, home prices in Nanjing increased by 29.7% year-on-year, while Hefei reported a rise of 29%. Although Suzhou is not included in official home price statistics, private data indicates significant price increases in that city as well.

While first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen have long enforced purchasing restrictions, the trend is expected to extend to more smaller cities as property prices continue to climb.