Beijing issues new rules to limit house purchase

Pedestrians pass by a real-estate agent in Beijing, capital of China, Feb. 14, 2011. (Xinhua/Zhao Wanwei)

Beijing Municipal Government Wednesday issued new rules limiting the number of homes each family can buy as the government steps up efforts to cool the property market.

The new rules prohibit new home purchases by Beijing families who own two or more apartments and non-Beijing registered families who own at least one apartment.

Non-Beijing registered families who have no residence permit or documents certifying that members of the family have been paying social security or income tax for five straight years are also banned from buying apartments.

Beijing families who own just one apartment can only buy one more apartment, according to the new rules.

The rules, issued shortly after the Chinese New Year holiday, seem to reinforce regulations that limited each Beijing family to buying only one new apartment from April last year.

The Chinese government has been stepping up measures to rein in soaring housing prices that have beome a major source of public complaints in the country's biggest cities.

But property prices have remained stubbornly high. Home prices in 70 major Chinese cities rose 0.3 percent month on month in December last year, and 6.4 percent year on year, after a group of measures failed to put a brake on the surging prices, government statistics showed.

Photo taken on Feb. 16, 2011 shows a building site of residential houses in Xicheng District of Beijing, capital of China. (Xinhua/Luo Xiaoguang)

The central government last month raised the minimum down-payment for second home purchases from 50 percent to 60 percent of the property's value and approved the launch of property taxes in Shanghai and Chongqing.

Beijing's new rules say banks can further raise the down-payment requirements for apartment buyers and raise interest rates on mortagages.

The central bank has increased interest rates three times since October, and hiked the banks' reserve requirement ratio seven times since the start of last year.

The new rules also allow the municipal government allocate more land for government-subsidized affordable housing and small commercial apartments. Affordable homes will account for half the total land designated for new apartments in the city.

The government will provide at least 100,000 affordable apartments and give housing subsidies to 20,000 low-income families this year. Low and medium-income families can start applying for about 10,000 low-rent apartments at the end of the year.

Soaring prices are a major concern for urban Chinese who are increasingly finding homes unaffordable. Prices in some major cities, such as Beijing, have more than doubled over the past two years due to easy credit and low lending rates.

One square meter in a new apartment in Beijing on average cost 20,000 yuan last year. But the square meter price for apartments within the Third Ring Road, the central urban area, exceeded 30,000 yuan, more than ten times the monthly income of an average Beijing resident.