[BEIJING] Shanghai authorities are preparing a fresh round of curbs aimed at cooling the city's soaring property market, including potential restrictions on mortgages and loans to developers, according to people familiar with the matter.
The potential moves come after new home prices in China's second-biggest city surged 27 per cent in July from a year earlier, and a plot of land sold for a national record price, prompting the cancellation of three other auctions in the past week.
Proposals under consideration include increasing down payments for first-time residential buyers to 50 per cent of a property's value from 30 per cent, and to 70 per cent for people borrowing to buy their second property or more, according to the people, who asked not to be identified because the plans haven't been publicly disclosed.
The Shanghai branch of the China Banking Regulatory Commission earlier this month held meetings with banks to discuss the possible changes, said two of the people.
Shanghai's municipal government and the city's CBRC office didn't immediately respond to inquiries seeking comment on the plans.
China's top leaders, who embarked on property market stimulus starting in November 2014, signalled that they're likely to be cautious on further easing measures even if the property market starts to cool.
After a Politburo meeting led by President Xi Jinping last month, they also pledged to curb asset bubbles, according to a report from the official Xinhua News Agency.
Further curbs in Shanghai would come on top of measures taken earlier this year to slow price increases. In March, the city's government tightened approval criteria for non-resident homebuyers, raised down-payment requirements for some second homes and banned unregulated lending, after soaring prices fueled a buying frenzy.
That round of tightening limited homebuying eligibility in Shanghai to people who had paid income taxes and social insurance for at least five straight years, up from two years. It also required a down payment of at least 70 per cent for second homes larger than 140 square meters or more than 4.5 million yuan (S$936,000) in value, and required at least 50 per cent down payments for other second homes.
Part of the new curbs are aimed at cooling land prices. This year, land plots in Shanghai have sold at an average floor price of 21,866 yuan a square meter as of Aug 23, more than double the 9,842 yuan a square metre they fetched a year earlier, according to Yan Yuejin, a Shanghai-based analyst at China Real Estate Information Corp, a property data and consulting firm.
Shanghai on Aug 17 sold a site north of Jing'an district for 100,315 yuan per square metre to Ronshine China Holdings Ltd, according to official land auction information posted online. The price per square metre worked out to be a national record for a residential plot, according to China Real Estate Information.
Smaller cities have also moved to cool housing prices. Nanjing, Jiangsu's provincial capital, and Suzhou, a regional manufacturing base, earlier this month raised down-payment requirements for some buyers of second residences, adding to restrictions introduced in Xiamen, a southern port city in Fujian province, and Hefei, the provincial capital of Anhui.