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September 27, 2016

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Home » City specials » Hangzhou

For some, home buying is beyond reach

HANGZHOU authorities have tightened restrictions on real estate by banning people without local residency permits from buying second homes.

The move is an attempt to rein in spiraling home prices that deny many first-time homebuyers a chance to buy their own apartments. It’s the second time municipal authorities have moved to curb the market in the last five years.

“This policy is not going to cool down a crazy market,” said Zhou Jianfang, who has been looking for an apartment he can afford for nearly a month. “It doesn’t help buyers like me because we don’t even have our first home. Developers and those who own more than one home haven’t reduced their prices, and demand continues to exceed supply.”

Zhou, a native of Anhui Province who works for e-commerce giant Alibaba, wants to settle in Hangzhou, but he can’t afford the down payment on a home.

During the recent Mid-Autumn Festival, he went to the launch of a new residential community in Xiaoshan District.

“The developers kept raising prices every 30 minutes, and finally they announced that all the apartments had been sold within two hours,” Zhou told Shanghai Daily. “The sales hall was packed with buyers, and many people were rushing to sign contracts. The craziness of the scene scared me off.”

Zhou finally decided to look at the existing home market in Xianlin Town in Yuhang District.

“On the first day, an owner there made a deal with me, and we agreed to sign a contract as soon as possible,” Zhou said. “But next day, he raised the price to 80,000 yuan (US$11,996). Every seller is trying to squeeze a huge profit out of this feverish market.”

According to a report in Qianjiang Evening News, the price of a 136-square-meter apartment in the Greentown Liu Xiang Yuan development skyrocketed 1 million yuan within two months. The situation is similar in other popular new residential communities.

The hot market, a boon to developers and existing property owners, slams the door on many potential buyers.

“Prices are already beyond my reach just because I hesitated for a month,” Zhang Qian, another resident, told Shanghai Daily. “And now the new restriction has shut me out completely.”

Zhang and her husband don’t have Hangzhou residency permits. They wanted to buy a bigger house after the birth of their first child because their current 65-square-meter apartment is too small.

“The new restriction is unfair and hurts people like us,” she said.

Hangzhou’s residential properties have been soaring in price in recent years. In 2011, Hangzhou was ranked second most expensive city in the nation, after Beijing.

That was the year when municipal officials took their first steps to try to curb runaway prices and property speculation. They stipulated that banks couldn’t provide loans for financing purchases of third apartments and could provide only 40 percent of financing for second homes.

In 2014, Hangzhou’s property market slumped. While home prices rose in nine of China’s 10 largest cities that year, Hangzhou prices fell. In order to stimulate the market, the municipal government rescinded its restrictions on home financing.

However, the market has rebounded strongly.

“In recent years, Hangzhou’s residential property price growth was slower than that of other second-tier cities,” said Qian Minjie, a property industry insider. “Now, with the recent G20 Summit and the Asian Games in 2022, many people are flocking to buy real estate here.”

Indeed, there has been an influx of buyers and investors from around Zhejiang Province and beyond, making it harder for local residents to compete. Nearly 70 percent of the buyers in the last year have come from other cities.

“The new policy does not really impact these out-of-town investors because they have already purchased homes and are waiting to sell them at a big profit,” said Zhang. “The policy just restricts ordinary citizens like us.”

Qian told Shanghai Daily that the rush to buy is being fueled by speculation.

“Profiteering by some investors is driving prices up, especially in places like Future Science and Technology Town in Yuhang District,” Qian said. “An apartment selling for 30,000 yuan per square meter is simply way too expensive.”

But for local residents, Hangzhou is home and they will continue to wait for an ideal moment to jump into the market.

“No matter how long it takes, I have to buy myself a home,” Zhou said.

“No home, no happiness.”




 

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