Beijing announces new property purchasing policy
March 27, 2017 Category Real estate, Weekly
Beijing has released a new property purchasing policy, which is likely to cause terminations of existing contracts and help cool down the capital’s property market. Under the new policy, buyers who own a property in Beijing or have loan records in or outside the capital, will face an increased downpayment if they want to move home or buy second properties in the city. “The regulation will have a more direct and obvious effect on the pre-owned property market,” Ren Qixin, Deputy General Manager of Yahao Real Estate, said. Buyers looking to trade their current house for another one need to pay at least 80% of the downpayment for property valued at more than CNY4.68 million, while most Beijing properties are valued at a higher price. “The average price of a Beijing property is CNY6 million per unit,” said Zhang Dawei, Analyst at Centaline Property. The policy raises the possibility that buyers could withdraw from contracts due to the financial pressure of meeting the downpayment. “The deleveraging effect was obvious. Most pre-owned property buyers will have to pay 80% as downpayment. It will cool down the pre-owned market, and slow down the sell-one-and-buy-another situation,” said Ren. “With reducing demand, we hope to see housing prices fall,” Hu Jinghui, Vice President of real estate agency 5i5j said. To target faked divorces, Beijing housing mortgage applicants who have been divorced for less than one year will be regarded as second-home buyers, rather than first-home buyers, and therefore will have to pay a higher downpayment and mortgage rate. In the past, many couples got a divorce solely to buy another property under favorable first-home policies.
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