Multi-city property market purchase restrictions continue to be implemented

Since the second-hand housing market had shown a strong rising trend in several cities in China, the governments have set out measures to contain the runaway rise in home prices. In this sense, cities have implemented limits on the purchase of second-hand housing.

The idea of setting buying limit is to reduce the price hikes on second-hand housing, thus to bring a better balance in the real estate market and give more opportunities for ordinary people to buy houses. It is well known that the high house prices are largely beyond the reach of the vast majority of potential buyers.

The purchasing limit helps to prevent speculation on real estate market and to avoid house prices bubbling up. The much talked about bubble in property industry may lead to a great financial turmoil and brings losses to millions of people. It is known that one of the major causes that triggered 2008 financial crisis was the over-heated real estate market. To avoid history repeating itself and avert massive losses to individuals, the implementation of purchase limit order is inevitable.

But it is also a matter of fact that the restrictions have made purchasing a second- hand house difficult. The buying limit is feared to have an impact on the whole market, thereby injuring the interests of contractors, developers and sellers.

Given the fact that purchase limit is still far from being effective, various cities have to take further steps to cool the market. For instance, have taxes on second-hand house. In addition, adjusting the buyers credit policy will be another effective way to prevent buying limit order from being overstretched and becoming a void in the real estate market.

To put it into a nutshell, Chinas purchase limit order should be kept for a certain period when the market shows an overheated trend. For those cities enforcing the measure, the order should be further reviewed to promote a balance in housing market. With enough regular attempts, purchase limit could potentially be an useful measure to stabilize the real estate market. It just needs to be handled with proper strategies.

The extension of housing restrictions in multiple cities is one way governments are attempting to stabilize the real estate market. China recently announced the extension of the housing purchase restrictions in several cities across the country. This is part of the government’s campaign to keep real estate prices at an affordable level, promote healthy development of the market, and ensure public safety and social stability.

The restrictions are being implemented in cities such as Beijing, Shanghai, Shenzhen, Guangzhou, and Nanjing, as well as other major cities around the country. In Beijing, for example, all buyers must produce proof of the two years legal residence in the city before purchasing a house in the city centre or certain surrounding districts. In Shanghai, eligible buyers are only allowed to purchase one apartment in the city, in addition to their permanent residence.

In addition to the housing purchase restrictions, the Chinese government has also adopted other measures such as higher minimum down payments and stricter loan requirements, in order to further stabilize the real estate market. The intention is to eliminate speculative housing purchases and reduce prices to a reasonable level.

The government is hoping that the extension of the housing restrictions will have a positive impact on the real estate market by encouraging rational consumption, promoting reasonable development in the market, and encouraging reasonable investment. In the meantime, the government hopes that these measures will also help to alleviate the housing shortage, which has been a source of concern in major urban areas.

Overall, there is no doubt that the extension of housing restrictions in multiple cities has had a positive impact on the real estate market. While it may be difficult for some buyers to get around the restrictions, the restrictions are ultimately necessary in order to ensure the stability of the market and ensure public safety and social stability.