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2nd-home buyers may pay more

By Hu Xiaocen   (Shanghai Daily)

08:54, February 20, 2013

CHINA may impose tighter housing policies by raising the borrowing costs for second-home buyers, sources told Shanghai Daily yesterday.

The government is expected to unveil more policies to rein in property speculation before or after the National People's Congress annual session in March. One of the measures being studied is to increase the borrowing costs for homebuyers, a bank source told Shanghai Daily.

Yang Hongxu, vice director at E-house China R&D Institute, a major property services provider and research organization in the country, said on Weibo yesterday that second-home buyers may need to put down 70 percent of the property price as initial payment, with interest rates 30 percent above the benchmark rates.

Second-home buyers now have to make an initial payment of 60 percent of the property price, which was raised from 40 percent in 2011. The interest rates they pay are marked up by 10 percent over the benchmark ones.

"If the government raises the down payment requirement and borrowing costs, it will put off potential second-home buyers who need loans," the source in Shanghai said.

Another bank source in Xiamen, Fujian Province, said first-time buyers may also be subject to an increase in borrowing costs.

Cities such as Kunshan, Dongguan and Jinhua have cut the quotas of housing provident fund this year, meaning fewer cheap loans for homebuyers, the Securities Times reported on its website yesterday.

Property sales have recovered since the second half of last year, and may climb at a faster rate this year of around 15 percent according to E-house China's latest report.

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