SHANGHAI - An array of cities in China have announced measures aimed at curbing the growth of housing prices, leading a nationwide campaign to deflate bubbles in the red-hot real estate market.
In Shanghai, local housing authorities on Saturday revealed the details of measures meant to curb speculation in the housing market.
The new rules, which follow the implementation of a trial property tax on Jan 28, forbid purchases of new homes by local families who own two or more homes or by non-local families who own at least one home.
In addition, properties may not be bought by non-Shanghai residents who lack documents showing that they have paid at least a year's worth of social security or income taxes in the city.
On the same day, similar restrictions were rolled out by authorities in Nanjing, capital of East China's Jiangsu province, and Harbin in Northeast China's Heilongjiang province.
And the Beijing municipal government unveiled even tougher measures on Wednesday, forbidding purchases of new homes by non-local residents who lack proof that they paid social security or income taxes in the Chinese capital for five straight years.
Industry insiders said these measures will help contain housing prices, which have continued to go up in most cities despite a slew of tightening measures put in place last year.
"The levy is designed to help regulate the property market and lead to reasonable housing policies that set aside some sections of land for intensive uses while saving others," said Shao Minghao, research head at Shanghai Hanyu Property Consulting Co. "That will definitely have an effect on the real estate market."
He said the purchase restrictions will be applied in the short term, until the real estate market in China is completely regulated.
"In two years, the central government aims to redirect up to 50 percent of all property investments from commercial or residential apartments into government-subsidized affordable housing," he said.
Authorities in the Chongqing and Shanghai municipalities introduced a long-awaited trial property tax on Jan 28.
Shao said the new tax will dampen property sales, helping prevent a real estate bubble and keep investors from putting too much money into the real estate market.
Some potential home buyers are ready for the new local regulations.
Qin Jie, a local man who is planning to buy an apartment to share with his future wife, said his name is now attached to a house he owns with his parents, while his bride-to-be's name is attached to a house owned with her parents.
Under the law, his marriage will give him a claim to a second property - the one partly belonging to his wife - making it illegal for him to buy a third.
Fortunately for Qin, the new rules have a rather obvious loophole.
"We should buy an apartment before getting formally married," he said.
Partly as a result of Shanghai's previous attempts at curbing speculation in the real estate market, sales of commercial homes fell by 42.4 percent from 2009 to 2010.
"The number of clients who came over for inquires declined nearly 20 percent since the central government said it would try out the property tax last September," said Jin Fangqian, the owner of a local property agency.
Jin said the purchase restrictions will probably deflate property buyers' demands even more.