China’s two biggest cities tightened rules on home purchases after the nation asked local governments to step up efforts to cool the property market.
Beijing, the capital, banned single-person households from buying more than one residence while Shanghai prohibited banks from giving credit to third-home buyers, according to the local administration Web sites.
The two cities will also enforce a 20 percent tax on capital gains from property sales.
“This will help calm people’s panic about home prices,” said Yi Xianrong (易憲容), a Beijing-based researcher at the Chinese Academy of Social Sciences, which advises the Cabinet.
“At the same time, restrictions on home purchases don’t change the fundamental demand, and it seems the new measures in Beijing are aimed more at short-term problems rather than long-term healthy development of the property market,” he added.
Home prices in the capital jumped 5.9 percent from a year earlier in February, the biggest increase in two years, the Chinese National Bureau of Statistics said on March 18.
Costs across the country rose 160 percent from 1998 to 2011, after ownership passed into private hands, government data show.
The Shanghai city administration, where new home prices in February rose 3.4 percent from a year earlier, also said it will increase down-payment requirements and interest rates for second-home mortgages.
The measures come a month after former Chinese premier Wen Jiabao (溫家寶), during his last days in office, ordered the central bank to raise down payment requirements for second mortgages in cities with excessive cost gains and told local governments with the biggest price pressures to tighten home-purchase limits.
China has “very serious” property-market bubbles in some regions, Xiang Songzuo (向松祚), chief economist of Agricultural Bank of China, told a forum in Beijing on Friday.
The nation’s real-estate curbs have seen “very limited” results because the steps were meant to slow demand, while policy makers should instead focus on boosting supply, Xiang said.
The measures announced by Beijing will damp local property trading in the next six months, Hu Jinhui, vice president of Bacic & 5i5j, the city’s second-biggest real estate broker, said in a statement.
“Home prices will firstly stop rising before a possible moderation in the second half,” Hu said.
Beijing, a city of about 20 million residents, has been implementing other rules including banning residents from buying more than two homes. Shanghai has been banning unmarried non-locals from buying homes in the city.