Cities try cooling down hot new home prices

More cities in China are expected to introduce restrictive measures to dampen speculative buying and curb soaring property prices, according to analysts. On Monday, Hangzhou, capital of Zhejiang province, imposed limits on second home purchases for buyers without a city household registrations. Earlier this year, four other cities — Nanjing, Hefei, Suzhou and Xiamen — announced measures to cool the residential property market, such as increasing the down payment requirements for second homes or even barring the purchase of second and third homes. In these cities, the average price of commercial residences has been rising by more than 30 percent yearon-year, and the new package of restrictions could spread to other cities with similar price rises, said Ding Zuyu, an analyst with realty research firm CRIC Information Group. Ding said provincial capitals and second-tier cities close to regional economic hubs are most likely to be hit by the cooling measures, because their housing prices continue to rise amid shrinking property inventory and land supply and a swelling urban population. According to the National Bureau of Statistics on Monday, the price of new commercial residences in August rose in 64 of the 70 cities it monitors, compared with 51 in July. Prices remained unchanged in two cities and fell in only four. Home buyers say they have felt the pinch of fast-rising prices and they expect more policies to be introduced to curb speculative buying. “Home prices are rising so fast that you don’t even have enough time to compare, consider or hesitate. Monthon-month home price growth can hit double digits in some cases, so you really need to make a quick decision on choosing the residence you might spend the rest of your life in, said 52-year-old Wei Jingdi, a high school teacher and home buyer in Suzhou, Jiangsu province. “If speculative buying is curbed, prices will rise more slowly and supply and demand will be balanced. Home buyers will feel much more relaxed,” Wei added. Xia Dan, an analyst at Bank of Communications, said the lack of inventory and land supply in some cities calls out for policy changes, and cities that tightened policies in the past year and have relaxed the curbs this year may consider going back to tightening.