Shanghai Introduces New Housing Measures

Shanghai Introduces New Housing Measures

Residential News » Asia Pacific Residential News Edition | By Francys Vallecillo | November 8, 2013 10:27 AM ET

Shanghai is implementing stricter measures aimed at cooling the city's rising home prices, in a move which might be a prelude to tightening measures around the country. 

The Shanghai government will increase the minimum down payment for second-home purchases from 60 percent to 70 percent, the city's housing bureau said in a statement.

This weekend, China's Communist party could extend new curbs on the property industry, in order to dampen rising prices, analysts believe.

"We think that the government will be forced to take some action to cool down the market," Mizuho Securities analyst Alan Jin said in a report. 

Tougher policies might include higher down payments, further restrictions on financing and mortgage rates for second homes and slower mortgage-loan approvals. 

The new Shanghai rules will require migrant families in Shanghai without residence permits to pay their monthly social security fees or income tax for two years before they can purchase their first home in the city. Previously, only one year of payment was required, Reuters reports. 

Shanghai is among the most expensive Chinese cities, with prices increasing 15 percent in September compared to last year. Home prices across China have been increasing, despite government measures aimed at the housing market. The increase to the minimum down payment in Shanghai comes after similar tightening measures in Shenzhen and Beijing

In today's announcement, Shanghai's government also said it will increase the supply of land for residential homes as well as lower the requirements for public housing.

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