The Beijing municipal government announced new steps to rein in its booming housing market on Friday, raising the down payment requirement for second home purchases in the city to at least 60 percent from 50 percent. The new requirement will come into effect on Saturday, the Beijing housing commission said in a notice on its website. The commission will also change the definition of a second-home buyer to anyone that has a record of taking out a mortgage in the city, even if they aren’t currently carrying a mortgage, so the higher down payment requirement will apply to more people. Other big cities have taken similar action in recent months.
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Beijing authorities also reaffirmed their commitment that average new home prices in the city will not rise on a month-on-month basis. The housing commission said that while measures taken to regulate the housing market in September have been effective, second-hand home prices have started to rise at a faster pace recently.
The capital’s real estate policies have “controlled speculative demand and stabilised market expectations. Residential home sales have declined, and average transaction prices have stabilised and even slightly fallen,” the Beijing Municipal Commission of Housing and Urban-Rural Development said.
“While second hand home price gains had clearly slowed, recently they have rebounded.” Beijing last raised the mininum second-home down payment to on Sept. 30, and while prices have remained relatively stable since then, sales remain brisk even during the typically weak winter season with little indication of price weakness.
Satellite cities near Beijing also have implemented new purchase restrictions during the last month. China will announce home price data for February on Saturday. Data this week showed property sales surged 25.1 percent in the first two months of the year, though growth in real estate investment showed signs of easing, according to official data on Tuesday.
Beijing on Friday also suspended issuance of individual mortgage loans for terms of longer than 25 years, the notice said, while those buying larger homes will have to put down 80 percent. Financial magazine Caixin reported Thursday that major banks in Beijing have temporarily stopped issuing housing loans, due to a lack of approved lending quota, with approval timelines extended and the central bank monitoring lending in real time.