Government to punish property price manipulation (2)

09:14, April 21, 2010      

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Earlier measures

On April 17, the State Council required banks to stop loans to third-home purchases and suspend lending to buyers who can't provide tax returns or proof of social security contributions in the related city for at least one year.

Local governments can limit the number of units that can be bought, while senior officials will be held responsible for failing to stabilize property prices, the statement said.

On Apr 15, the government raised mortgage rates and downpayment ratios for second home purchases after a record jump in house prices in March. Buyers purchasing their second houses must pay at least a 50-percent deposit, up from 40 percent, and interest rates should be at least 1.1 times the benchmark rates, the State Council said.

After a series of strict measures on curbing soaring housing prices, experts and homebuyers are optimistic about the future of the property market.

Yan Jinming, a professor of land management at Renmin University of China, said it is the first time that the central government is taking comprehensive measures to balance land supply and demand, which will effectively cool the overheating real estate market.

"The series of measures give residents confidence in the domestic housing market and curbs speculation in the country's major cities," Yan said.

Latest statistics show between Friday and Monday, property developers of about 92 housing projects had given discounts of 1 to 5 percent, the Beijing Morning News reported on Tuesday.

Many potential house buyers are taking a wait-and-see attitude.

"Before the measures, I was always afraid that if I did not buy a house now, it would never be affordable for me. But now I definitely won't buy at such a high price," a house buyer surnamed Chen said at Soufun, the country's largest real estate portal.

Source: China Daily
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