Shanghai Government to cool housing market: 70% deposit on second ‘home’

SHANGHAI – The Municipal Government here is expected to unveil several tightening policies in a bid to cool the city’s overheated housing market because of concern that an increasing number of home seekers are unable to cope with rising prices. Possible measures may include a minimum 70% down payment for second-home buyers if the property is defined as a “non-normal” home, or a minimum 50% down payment for second-home buyers who buy “normal” houses, Caixin magazine reports on its website.

Second-home buyers now need to pay a minimum 40% down payment, regardless of whether it is a normal or non-normal home. The Government will also be harsher in defining whether a property is the buyer’s first home or not.

Deputy General Manager of Shanghai Wanye Enterprises Laoximen Real Estate Development Co, Hubert You, said: “While details of the tightening measures are yet to be released, we all expect to see them come out sooner or later as the local market has turned red-hot, particularly over the past few months.”

China’s National Bureau of Statistics earlier released data that showed house prices in China rising at their fastest pace in almost two years in February, amid bullish demand in major cities. First-tier cities, such as Shenzhen, Shanghai and Beijing, remained the top three in new home price growth, with the average cost up 56.9%, 20.6% and 12.9% respectively from a year earlier. www.webershandwick.cn (ATI).