Signs of a cooling effect have emerged as Chinese cities have taken steps to control their red-hot property markets.
Shanghai has adopted measures that include increasing land supply and strengthening the supervision of capital to address its sky-high housing market.
According to the measures published Saturday, the city will increase the supply of land for commercial housing construction. A work team composed of staff from government departments will be formed to regulate the funding sources for land purchases.
The city will also enhance supervision over the purchase of homes that have previously been owned but never used. Stricter supervision over new home prices will also be implemented.
Authoritative property market information will be released on a regular basis to stabilize market expectations.
Also on Saturday, Nanchang, capital of east China's Jiangxi Province, adopted a spate of measures to restrict home buying.
In certain districts of the city, local residents who own one or more houses will not be allowed to buy new homes. People without a local hukou (household registration certificate) who own one or more houses will not be able to buy either new or pre-owned houses.
First-time home buyers will be required to make a minimum down payment of 30 percent, compared to 20 percent previously.
Statistics show over 90 percent of cities surveyed in August reported new home price rises, up from 73 percent in July. Central bank data showed that banks in August made 529 billion yuan in household loans, with mortgages accounting for 55.7 percent of the total.
Since Sept.30, a dozen cities, including both first-tier cities such as Beijing and Shenzhen as well as smaller cities, have rolled out policies ranging from higher down payments to home purchase restrictions to curb speculative housing purchases.
Zhou Xiaochuan, governor of the People's Bank of China, said the Chinese government is very concerned about the recent rise in home prices and will take active measures to regulate the market.
He made the remarks while co-chairing the Fourth G20 Finance Ministers and Central Bank Governors Meeting with Chinese Finance Minister Lou Jiwei in Washington Thursday.
COOLING DOWN
Sun Qiang, a real estate agent in northern Beijing, believes that the higher down payment minimums introduced on Sept.30 have discouraged many buyers.
"I was busy for all of September, and I even took 10 groups of clients to see houses one day," he said. "But during the first three days of the National Day holiday (Oct. 1-7), I only received two groups."
Hu Jinghui, vice president of leading real estate agency 5i5j, said records show that purchase contracts for 204 new houses in Beijing were signed from Oct. 1 to 6, down 73.7 percent from the same period in September and a year-on-year drop of 42.2 percent.
According to the Hangzhou branch of 5i5j, an estimated 20 to 30 percent of clients will cancel or delay home buying plans due to credit tightening.
In Tianjin, the actual transaction volume for pre-owned houses through 5i5j.com during the National Day holiday dropped by 50 percent from the same period of September.
WAIT-AND-SEE
"The slack market during the holiday could partially be the result of people traveling. We will spend some more time observing the market reaction to readjust our sales strategy," said Mr Zhang, a real estate agent in Beijing.
Zhang Jie, head of tmsf.com, a Hangzhou-based housing market research institute, agreed that the significance of the transaction volume during the holiday is limited.
However, he said a series of control measures by the city have somewhat curbed investment demand. "A growing number of buyers are in a wait-and-see mood," he said.
Yan Yuejin, an analyst at E-house China R&D Institute, is hopeful that with policy controls in place, home prices will gradually drop to a reasonable range.
Jia Shenghua, a real estate researcher at Zhejiang University, said the control measures are expected to achieve positive results, and more policies must be adopted to stabilize the market.
