Shenzhen hikes down payment as city leads home price rises

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November 2, 2013

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Shenzhen hikes down payment as city leads home price rises

By Feng Jianmin and Cherry Cao | November 2, 2013, Saturday |

Print Edition

Shenzhen became the first Chinese city to raise the minimum down payment to 70 percent for second-home buyers in an effort to curb soaring housing prices.

Shanghai, however, has no such plans with its regulator insisting yesterday it will keep the current 60 percent threshold unchanged.

The Shenzhen branch of the People’s Bank of China said on its website yesterday that second-home buyers seeking mortgage have to pay at least 70 percent down payment of the home value — 10 percentage points more than the previous requirement.

Shenzhen had the largest home price increase among the 10 major Chinese mainland cities with a monthly rise of 2.83 percent in October, data showed yesterday.

The Shanghai headquarters of the central bank yesterday said “there is no immediate change” to the local rule of 60 percent.

Meanwhile, home prices across China rose at an accelerated pace in October, surging for the 17th straight month.

The average price of new houses in 100 cities across the country increased 1.24 percent from September to 10,685 yuan (US$1,752) per square meter, the China Index Academy said yesterday.

That compared to a growth of 1.07 percent in September and 0.92 percent in August.

Seventy-five cities saw monthly price increases, down from 79 in September. Out of that, 29 cities registered a growth of more than 1 percent. Changshu in eastern Jiangsu Province led last month’s gainers with a 3.92 percent rise.

There were price drops in 24 cities with Lianyungang, also in Jiangsu Province, suffering the biggest decline of 2.18 percent.

In the 10 largest cities on the mainland, the average price of a new home climbed 1.95 percent to 18,533 yuan per square meter last month, compared to a month-on-month growth of 1.72 percent in September.

In Shanghai, new home purchases stood above 1.4 million square meters for the second consecutive month in October, according to a report released yesterday by Shanghai Uwin Real Estate Information Services Co.

Sales of new residential properties, excluding government-funded affordable housing, dipped 1 percent to 1.404 million square meters last month. It represented a year-on-year surge of 60 percent, Uwin data showed.

They were sold for an average 24,932 yuan per square meter, a monthly rise of 1.33 percent and an annual increase of 14.2 percent.

“Robust sales registered in both September and October demonstrated very solid demand from end-users,” said Huang Zhijian, Uwin’s chief analyst.

Shenzhen saw the largest increase among the major cities with a monthly rise of 2.83 percent, followed by a 2.56 percent growth in Beijing and a 2.35 percent rise in Shanghai.

“Though the average home price in 100 cities continued to rise at a faster rate, the number of cities seeing price increases of more than 1 percent fell from a month earlier, an indication that overheatedness is still confined to a rather small scale,” the index academy said.

“Generally, the availability of more mid- to high-end properties in the market contributed to the rise in average price with sentiment among buyers still remaining robust,” it said.

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Shenzhen hikes down payment as city leads home price rises

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