Agencies and Kevin Xu
Shenzhen announced new restrictions on home purchases yesterday in a fresh bid to arrest sharp price rises and curb speculation in a market fueled by an influx of talent and short supply.
Its government said only people who have lived in Shenzhen, have residency permits and made tax or social security contributions for three years are eligible to buy. Previously, anyone with a residency permit could buy.
Despite the economic fallout from the pandemic, Shenzhen has seen a sharp rise in prices this year as loose residency requirements aimed at attracting talent and tight home supply led to frantic buying. Second-hand prices in the city of 13 million people rose 12 percent in May from a year earlier, official data showed.
"The new policy is quite stringent and it sent a strong signal that the government will tame excessive home price rises and prevent speculation[despite] the backdrop of broader policy easing after the coronavirus," said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institution.
Shares of Shenzhen-based developers fell. Kaisa (1638) fell 2.54 percent to HK$3.45. Logan (3380) dropped 2.23 percent to HK$14.02. That came after a cautious liquidity operation by the People's Bank of China, in which some funding was withdrawn from the banking system for July.
Across China, signs are also emerging that rising credit supply to the economy has in part led to a jump in upmarket prices.
Wealthy buyers are snapping up luxury flats, in many cases to guard their wealth against anticipated inflation in the sector.
Homes priced at about 20 million yuan (HK$22.18 million) in the country's biggest cities have emerged as among the most popular since April, when authorities started to ease credit to help revive the economy, according to China Real Estate Information.