Chinese policymakers are having to come up with ever more inventive ways to curb rapid house price growth as the nation’s red-hot east coast property market show little sign of cooling.
Even with tighter home buyer restrictions such as increased down payments, reducing maximum loan terms and limiting multiple property purchases, they’re not having much luck, particularly in Beijing, the nation’s capital.
Like many other major centres in the nation’s east, prices continue to surge.
According to figures from the National Bureau of Statistics, prices in Beijing increased by 22.1% in the year to February, slowing only fractionally from lofty levels reported in the middle of last year.
And that’s the official number, with evidence elsewhere suggesting that price gains continue to go unchecked.
According to data released by the Chinese Real Estate Industry Association last month, the average price per square metre in the city rose to 60,700 yuan in February from 52,500 yuan in October, an increase of 15.6%.
That’s 15.6% in four months.
It’s creating a problem for housing affordability and also increasing financial sector risks.
In what looks to be an increasingly desperate attempt to curb house price gains, the government has taken the unusual step of ordering 15 online real estate portals to remove what it deems to be misleading information, false advertising and even advice on feng shui, aimed at reducing speculative activity within the market.
The government, according to a story from the state-run Xinhua news agency, stipulated that advertisements on the websites should not promise rising returns on Beijing real estate investment, said Reuters.
It also said that the websites should not offer to help prospective buyers handle matters related to local “hukou” residence permits or school enrolment, nor should they spread rumors or disseminate misleading information such as “limitless potential for price gains”.
Hokou resident permits are issued to citizens of the city, allowing access to government services.
Content on feng shui or any form of financing advice should also be removed, said Reuters.
Extreme measures in anyone’s language, although it’s questionable as to just how effective they’ll be, given loose monetary policy has counteracted all other attempts to slow speculative activity within the cities property market.
Already the government has increased the minimum down payment on buying an second home in the city to 60%, and 80% for larger homes.
It has also banned the purchase of any more than two properties in the city, and reduced the maximum loan term for mortgages down to 25 years.
We’ll have to see whether banning advice on feng shui will do the trick.
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