Tightened control on real estate market

After issuing real estate control measures on March 17, Beijing municial government further tightened its housing mortgage rules on Friday to cool the local property market.

On March 17, Beijing implemented a new policy, which raised the down payment for a second house purchase from 50 to 60 or 80 percent of the purchase price.

“Second house buyer” has also been redefined, and it now refers to anyone who has taken a mortgage not only in Beijing but also in any other area nationwide. Even if the purchasers sell their house and don’t own a house at present, they will be regarded as a “second house buyer” because of the mortgage record they had.

China’s central bank also announced tightened rules on mortgages on Friday to curb speculative purchases in Beijing’s property market and control credit risks. Targeting fake divorces, Beijing house mortgage applicants who divorced less than one year ago will be regarded as second home buyers and have to pay a higher down payment, according to a statement released by the People’s Bank of China.

There will be further investigation into the source of a down payment to ban leveraging financial products, and commercial banks have been instructed not to offer loans to applicants who violate the rules, the statement added.

Following Beijing’s example, other cities have rolled out similar rules to curb property market speculation since last Friday.