Shenzhen's planning and land commission yesterday announced new measures to limit the purchase and resale of apartments in a renewed effort to tame the housing market.
Companies and institutions are not allowed to purchase new or pre-owned commercial housing for an unspecified period of time, according to a circular published by the commission. Previously speculators had registered companies to circumvent the restrictions that only targeted individuals.
Business apartments – which usually do not have a gas supply – built on newly purchased land are not for sales and can only be rented out for a maximum of 10 years for a single contract. Newly purchased business apartments are not allowed to be resold within five years of the ownership certificates being issued.
According to the new rules, newly purchased commercial apartments are barred from being resold within three years of the ownership certificates being issued.
The new rules also make it more difficult to obtain mortgage loans for those who get divorced to qualify for home purchases. Homebuyers who have gotten divorced within two years will have to pay a down payment of at least 70 percent. The down payment can be lowered to 50 percent if the buyer can prove that their family owned only one home before getting divorced.
The down payment can further be reduced to 30 percent if the buyer shows evidence that the family didn’t own a home prior to the divorce, according to the new rules.
The new rules became effective yesterday.
Homebuyers are also facing increased mortgage rates. Last week, major commercial banks in Shenzhen said they were raising interest rates for mortgage loans by up to 30 percent for first-time homebuyers, and up to 20 percent for second properties.
The city government has also intervened on the pricing of new homes over the past months. The prices of new projects are regulated by the government, while the prices of pre-owned homes are decided by the market, sometimes leading to huge price gaps. As a result, some new projects are resorting to lotteries, as lots of people line up to profit from the price differences.
Editor: Will