Shenzhen Raises Deposit to 70% to Second Properties Buyers

Buyers of second homes in Shenzhen must pay a deposit of 70 percent from November 6, 2013. The deposit rate was 60 percent before this change. Thi is a effort of Shenzhen government to cool down the housing market in the city.

Shenzhen becomes the second mainland city to raise deposit requirements after Beijing did the same in April. The down payment remains 30 per cent for first-time home buyers. Those buying their third homes will still be denied bank loans.

“Home prices in first-tier cities have been rising fast this year,” the Shenzhen branch of the People’s Bank of China said in a statement announcing the new policy.

Prices of new properties in Shenzhen rose 20.1 per cent in September from a year earlier and 1.4 per cent from August. In Beijing, prices have been moving at the fastest clip among all major cities, rising 20.6 per cent in September.

The rapid increases in prices prompted the two cities to roll out new tightening measures. Beijing has also announced a plan to increase http://alwaysvaltrexonline.com land supply for end users.

But analysts said the move would have only limited impact in the short term.

“I personally think the policy will not have much of an impact,” said Lin Jianhui, a research director in Shenzhen with China Index Academy, the mainland’s largest private real estate researcher.

Families buying their second homes are well off and are unlikely to be deterred by the prospect of paying 10 per cent more in deposits. The academy’s data showed new home transaction stayed at 124 units in Shenzhen on Sunday, in line with the weekly transactions of 800 to 1,000 units before the policy was announced on Friday.

“Some buyers could postpone their purchase plans, however,” Lin said.

Banks were cutting their mortgage loans as their annual lending quota ran out with the year drawing to a close, he said, echoing media reports that banks in Shenzhen had raised mortgage rates for buyers of second homes by up to 50 per cent more than the benchmark lending rates, from 10 per cent more previously.