A number of second-tier cities in China unveiled home-purchase restriction measures recently. Following the policy moves, the housing market is likely to go through a correction from now on, and the ripple effects might be felt in first-tier cities as well.
Xiamen’s bureau of land resources and real estate management announced on Aug. 31 that local registered residents are prohibited from purchasing a third home with floor space less than 144 square meters, and that non-locals are banned from buying a second home.
The new rule will also apply to residents who haven’t paid individual income tax to the city for 12 straight months within the past two years, as well as non-local residents who can’t provide proof of social security payments.
In the meantime, the central Chinese city of Wuhan has raised the minimum down-payment on second homes. The down-payment has been increased to 40 percent from 30 percent for those who already own a house but are buying a second one in downtown districts, according to a circular from local authorities.
And those who have two or more homes but still owe a mortgage will also need to pay 40 percent down-payment at least. Local banks will continue to stop lending to those who have two or more homes but still owe two mortgages, the statement said. The new measure took effect on Sept. 1