Chinese cities to limit home purchases

Chinese cities, including Shanghai and Guangzhou, will restrict home purchases after new property curbs by the government aimed at preventing a housing bubble.

The two cities will ban local residents who own two or more homes from buying more property and non-local homeowners from making additional purchases, according to the state-run Xinhua news agency and the Guangzhou Daily yesterday. Other cities with similar plans include Nanjing and Harbin, Xinhua reported.

China extended property curbs last month, including raising the minimum down payment for second-home purchases, telling local governments to set price targets on new properties and introducing taxes for residential homes in Shanghai and Chongqing. The central bank raised interest rates on Feb 8 for the third time in four months.

China’s new home prices last month rose from a year earlier in all but two of the 70 cities monitored by the government, defying the new property curbs, the statistics bureau said on Feb 18.

The measures by Shanghai and Guangzhou follow similar rules in Beijing, where the municipal government added a requirement for non-residents to provide five years of tax documentation to buy apartments in China’s capital.

Families not locally-registered with the Shanghai authorities can’t buy property without showing they paid tax for at least a year, according to the Xinhua report yesterday.

New home prices in Beijing advanced 6.8 per cent in January from last year, while Shanghai climbed 1.5 per cent, the statistics bureau said.

Haikou had the biggest gain, surging 21.6 per cent, and 10 cities had increases exceeding 10 per cent.

Source : Channel NewsAsia – 21 Feb 2011

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