April 19, 2010

And you thought Canada’s new mortgage rules were a bit tough! Check out what China is doing to slow down the housing market!

However, Royal Bank of Canada senior analyst Brian Jackson said the measures would not be as effective as higher interest rates.

From the Associated Press:

“China has moved to further curb real estate speculation by telling banks they will be allowed to refuse additional mortgages to buyers who own two or more properties.

The move comes soon after the government last week raised the minimum down payment for second home purchases as authorities try to rein in the market with the economy growing at a blistering pace.

Under the new rules, announced at the weekend, banks can also refuse loans to people who cannot prove they have lived and paid taxes for at least one year in the city where they intend to buy, the State Council, or cabinet, said.

Last week the State Council raised the minimum down payment for second home purchases to 50 percent and set a minimum 30 percent deposit on first homes bigger than 90 square metres (970 square feet).

The latest moves highlight growing concern in China that the property market is overheating, after prices in major cities rose 11.7 percent year-on-year last month, the fastest since the survey was widened to 70 cities in July 2005.”

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