China’s southern megacities of Guangzhou and Shenzhen are the latest centres to impose new measures to cool their overheated real estate markets, including higher mortgage down payments and home purchase restrictions.
A property boom has given a welcome boost to China’s economy this year, fuelling demand for everything from construction materials to furniture, but a growing buying frenzy is adding to worries about ever-rising debt and risks to the banking system.
The new measures are the latest steps to tighten credit flowing into the property sector as the government tries to balance the need to prevent bubbles while stimulating economic growth.
Prices for new homes in the booming tech centre of Shenzhen rose 36.8 per cent from a year ago in August, while Guangzhou’s new home prices rose 21.1 per cent over that period, National Bureau of Statistics (NBS) data showed.
Other cities including Chengdu, Jinan, Wuhan and Zhengzhou have already announced new restrictions on property purchases as the government tries to dampen prices stoked by property speculators in second- and third-tier cities across the country.
The average new home price in 70 major cities climbed an annual 9.2 per cent in August, up from 7.9 per cent in July, according to the National Bureau of Statistics.