New housing policies in Shanghai, Shenzhen, and other first-tier cities have brought some calm to China’s property markets.
But how is the average citizen responding to the new policies?
CCTV’S Hu Nan reports from Shanghai.
China Property Market: New housing policy meant to reduces speculationNew housing policies in Shanghai, Shenzhen, and other first-tier cities have brought some calm to China's property markets. But how is the average citizen responding to the new policies? CCTV'S Hu Nan reports from Shanghai.
Home buyer Mr. Peng decided he wanted to invest in a big apartment.
He sold one of two smaller apartments that he already owned, but the government implemented its new housing policy before he could settle on his new home.
The new regulations require people like Mr. Peng to pay a 70 percent down payment for a new apartment bigger than 120 square meters (around 1291.67 square feet), instead of 40 percent like before.
The new loan rate is 110 percent of the base rate. So it will now take longer to save up for a new home.
Property developers have started adjusting their sales strategies to fit with the new laws.
“When targeting people who are buying their first home, we have to lower the price as much as possible. But investment purchases are hurt by this policy. Basically we are just abandoning this group of customers,” OuYang Jie, vice president of Futureland Development Holdings Limited said.
The new policies are expected to cool the market down further, reduce speculative buying, and bring the property market back on a stable development path.
Du Jinsong on China’s housing market
For more on this topic, CCTV America’s Michelle Makori spoke to Du Jinsong, the head of Asia Property Research at Credit Suisse.