Econintersect: Buyers of second homes in China will have to put down 60 percent of the price, it was announced yesterday, up from the current 50 percent in the country’s latest bid to curb property speculation. The State Council, or the Cabinet, also said that buying a third home in the city where residents already have two is banned. And residents could only buy one home elsewhere. Photo: empty residential towers in Zhengzhou.Also, families will be banned from buying any homes in cities if they have not been long-time residents and cannot provide tax or social insurance certificates to show their length of residence.
The measures were among eight new government actions to combat soaring home prices. Others prevent land hoarding and tax properties sold within five years of purchase on the total value rather than the profit.
China is trying to cool a soaring expansion of the residential real estate market which has seen prices rise 5% to 7.5% across the country in the past year. In some markets, Beijing and Shanghai in particular, home prices are up 40% or more in a year. China Real Estate Information has reported the Shanghai and Beijing numbers, along with 33% rise for Shenzhen and 23% in Guangzhou.
Also troubling is the overbuilding in China. New cities have been built for millions and are empty. From Fortune:
(Gillam Tulloch proved his point by)pulling up Google (GOOG) Earth and taking a look around. He saw the empty streets of Ordos in Inner Mongolia. He pinpointed the forlorn $19 billion Zhengzhou New District in Henan, a place with plans for fifteen yet-to-be-inaugurated universities. And he saw Erenhot, Xilin Gol, in Inner Mongolia, otherwise known as the middle of the desert. As Tulloch dryly points out: this is not exactly the first place that comes to mind to locate a luxury hotel. It’s spooky, just as you would suspect a bunch of ghost towns to be.
Business Insider has published a number of satellite images of vacant China real estate devolpments.