Nanjing and Suzhou raise minimum downpayments on property

China | 12 Aug 2016 1:05 pm

Two cities in eastern Jiangsu Province announced new measures to contain rising house prices.

Nanjing, capital of Jiangsu, is to raise the minimum downpayment for second homes, if any mortgage on the first is still owing, from 45 percent to 50 percent. If the mortgage on the first home has been paid off, the down payment will increase from 30 percent to 35 percent.

In nearby Suzhou, the residential land bidding deposit was raised from 20 percent to at least 30 percent of the starting price, while downpayment of land-transfer fees were increased from 50 percent to 60 percent or above. Full land transfer fees must be paid "within three months." The city will make more land available for residential purposes until 2018.

Downpayments on second homes with mortgages still owing on the first will rise from 40 percent to 50 percent in most of downtown Suzhou, where non-permanent residents must now provide evidence of personal income tax or social security payments.

Among 70 cities monitored by E-house China R&D Institute in the first half, inventories fell in 44,while inventories grew in 26. In bigger cities like Suzhou and Nanjing home prices are rising swiftly while in smaller cities, a huge overhang of unsold houses remain.

Previously, authorities had cut interest rates, reduced downpayments and removed restrictions in all but the very biggest of cities to stimulate sales. Now, in places like Nanjing, new home prices are growing at over 30 percent a year, but according to industry insiders, these downpayment adjustments are minor and will do very little to curb speculation.

Shenzhen and Shanghai have already attempted to rein in speculation. In Tianjin and Wuhan, the mortgages from housing provident funds were capped in July, and banks in some cities have taken similar measures against developers.-Xinhua

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