China Merchants raises Shanghai second-home down payment requirement to up to 70 per cent
One Shanghai bank has raised down payment requirements on second homes to up to 70 per cent, beyond the Chinese central bank’s minimum guidance of 40 per cent, sources told the South China Morning Post.
A mainland Chinese bank has raised the down payment requirements on second homes in Shanghai to 70 per cent, far beyond the Chinese central bank’s minimum guidance of 40 per cent, sources told the South China Morning Post.
“We are conducting this requirement until the end of March,” a banker in charge of personal loans who asked not to be named, said. “This could be stricter from April 1 as the government doesn’t want prices to rise too fast.”
China Merchants Bank now requires a 50 per cent minimum deposit from buyers of second residences under 144 square metres and 70 per cent for those over 144 square metres.
Shanghai’s home prices have surged in the past year. Average new-build prices hit a record 37,144 yuan per square metres last month. The cost of a property on the secondary market soared to an average 47,033 yuan per square metres.
Shanghai Communist Party Secretary Han Zheng warned this month against irrational sentiment in China’s second-biggest city’ s housing market and pledged to tighten housing policy.
Alan Jin, a property analyst at Mizuho Securities said government is in a very difficult position as on one hand they don’t want prices in big cities go out of control, on the other hand they are concerned if any tighten policies would hurt the whole industry sentiment, which is an key economic pillar.
“The government is very tolerant so far,” he said.
According to the People’s Bank of China’s guidance, first-time home buyers in Shanghai can enjoy a minimum 30 per cent down payment requirement. For second-home buyers with an existing mortgage that rises to 40 per cent.
The Post has learned first-time home buyers can still expect a minimum 30 per cent requirement.
