China has been introducing measures to cool the housing market in the country. Shenzhen and Nanjing are the latest ones to do so after they raised property deposit thresholds.
According to Xinhua news agency, Shenzhen on Monday raised the deposit requirements for first-time homebuyers who secured mortgages in the past two years and for some second-home buyers from 30 percent to 40 percent down payment, Reuters reported.
In addition, non-local buyers who are looking into purchasing properties in the city will only be qualified if they have paid income tax and social security premiums for the past three years. The city is also implementing the ban on small lending firms and other similar financial institutions from issuing margin mortgages to homebuyers. Shenzhen also plans to build more housing units to boost supply to balance with the demand.
Amid the economic uncertainties in China, the country is seeing house prices rebound to a level that might result in property market bubble. In Shenzhen, house prices soared to as much as 57 percent last month compared to the same period in 2015.
In Nanjing, authorities have increased the minimum down payment required from 20-25 percent to 30 percent. This is applicable to second-time buyers who apply for mortgages twice. The central bank also asked banks to carefully look into mortgage applications if those who are applying can qualify to preferential policies for first-time homebuyers.
Meanwhile, The Daily Telegraph has reported that the government's measures to cool down the hot real estate markets have hit Chinese stocks. After gaining 1 percent over the weekend, the Shanghai Composite Index dropped by 0.7 percent on Monday to 2,957.82 points. The CSI300 index of the largest companies on the Shanghai and Shenzhen stock exchanges declined by 0.9 percent to 3,169.73 points. Shanghai, which last week curbed approval criteria for non-resident homebuyers and banned unregulated lending, was the biggest loser with property index down 1.8 percent on Monday.
