Beijing limits house purchasing for market control

Wednesday, February 16, 2011

BEIJING - Beijing municipal authorities have, in a significant decision, put a limit on the number of houses a family can buy in the Chinese capital city. The decision comes as part of the government’s initiative to control rising prices of property in realty market.

The new rules bar Beijing families, who own two or more apartments, and non-Beijing registered families, who own at least one apartment, from buying more houses.

Non-Beijing registered families, not having residence permit or documents certifying that members of the family have been paying social security or income tax for five straight years, are also banned from buying apartments, Xinhua reported Wednesday.

Beijing families, owning just one apartment can only buy one more apartment, according to the new rules.

The rules, issued shortly after the Chinese New Year holiday, come into effect from April last year.

The Chinese government has been stepping up measures to rein in soaring housing prices that have become a major source of public complaints in the country’s biggest cities.

But property prices have remained high. Home prices in 70 major Chinese cities rose 0.3 percent month on month in December last year, and 6.4 percent year on year, after a group of measures failed to put a brake on the surging prices, government statistics showed.

The central government last month raised the minimum down-payment for second home purchases from 50 percent to 60 percent of the property’s value and approved the launch of property taxes in Shanghai and Chongqing, a major city in southwestern mainland China.

Beijing’s new rules say, banks can further raise the down-payment requirements for apartment buyers and raise interest rates on mortgages.

The central bank has increased interest rates three times since October, and hiked the banks’ reserve requirement ratio seven times since the start of last year.

Prices in some major cities, such as Beijing, have more than doubled over the past two years due to easy credit and low lending rates.

In Beijing, a new apartment on an average cost 20,000 yuan ($3,035.6) per square metre last year.

But the square metre price exceeded 30,000 yuan ($4,553), which is more than 10 times the monthly income of an average Beijing resident.

Filed under: Economy

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