Tuesday 21 November 2017

Nanjing starts bid to slow runaway house price growth

Nanjing residents are to be restricted from owning more than two homes in a bid to prevent a property bubble
Nanjing residents are to be restricted from owning more than two homes in a bid to prevent a property bubble

Hou Wen and Chen Na

Nanjing officials are tightening home-buying rules to ward off speculators, following steps in other cities to cool their overheated property markets and reduce fears of a bubble in their jurisdictions.

Under a new policy that goes into effect on Monday, buyers in the city who do not have a local residency permit will not be allowed to buy another home if they already own one in the city's eight major districts, according to a statement posted on the Nanjing government's website.

In addition, local residents who already have two homes are banned from buying new homes, the statement said.

Nanjing, the capital of Jiangsu province, is one of several cities to have rolled out measures to address surging housing prices.

The average price for a new apartment jumped 52pc in August from July to 29,000 yuan ($4,350) per square metre in Yuhuatai district, one of the city's eight districts, according to market analysis firm E-House China R Institute.

The policy is intended to address a price hike spurred by speculation while keeping the local economy growing, said Li Yujia, an analyst at the Shenzhen Real Estate Research Centre.

Major cities in China have seen a housing boom since mid-2015. It's been fuelled by the central government's move to ease down-payment requirements and real estate transaction taxes with the goal of whittling down inventories of unsold homes in smaller cities.

However, these policies have pushed up housing prices in first and second-tier cities as 'mom-and-pop' investors poured money into the property market - which is considered a better investment in the face of a weakening yuan and volatility on China's stock markets.

In 30 major cities, August property sales by floor space increased 27pc year-on-year to 22.9 million square metres, the E-House China R Institute reported.

Surging prices have raised concern among the country's leaders. Xu Kunlin, an official at the National Development and Reform Commission - the country's top economic planner - called on local governments in July to rein in real estate prices.

In a Politburo meeting led by President Xi Jinping, China's top leaders pledged to curb 'asset bubbles'.


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