SHENZHEN issued a slew of policies Friday to tame its property market, including raising down payment requirements for second-home buyers.

    In a statement issued late Friday night, the Shenzhen government said those who buy a first home but have taken out home mortgages over the past two years or already own one home but have paid off mortgages must make at least a 40-percent down payment, instead of the previously required 30 percent, when applying for home loans.

    Nonlocal buyers must have paid income tax and social security premiums for three consecutive years, up from one year under the previous requirement, if they wish to buy a house.

    Shenzhen authorities have also ordered measures to beef up guards against financial risk in the property sector.

    The government said it banned financial institutions, including Internet finance companies and small-sum lending firms, from offering margin lending to home buyers.

    It also called to strengthen supervision and crack down on various violations.

    Analysts said the regulations are meant to curb surging prices in the city’s property market resulting from “irrational emotions,” speculation and illegal practices by some companies and agencies.

    The Shenzhen government said it will increase land supply and build more government-funded houses to balance the market demand and supply.

    It added that in the five years to 2020, it planned to build 400,000 government-funded houses.

    The Shanghai government also announced similar policies the same day.

    Under the new rules in Shanghai, which came into effect Friday, those who already own a house must make at least a 50-percent down payment, instead of the previously required 40 percent, when applying for home loans. The minimum down payment rises to 70 percent if the home’s size and price surpass the criteria for an ordinary house.

    Nonlocal buyers must also prove they have paid income tax and social security premiums in the city for five consecutive years, up from two years under the previous requirement.

    The city will ban developers and housing agencies from offering certain loan services to buyers. It also vowed a tougher stance on housing speculation.

    In February, new home prices in Shanghai jumped about 20 percent year on year, while in Shenzhen, prices soared 72 percent.

    Average prices for new houses in Shenzhen reached about 43,000 yuan (US$6,570) per square meter in December.

    (SD-Agencies)

    “One of the efficient measures to cool the market is to introduce more affordable housing in the years ahead,” said Qiao Hengli, deputy director of Shenzhen’s urban planning and land resources commission.

    “They will be mainly offered to professionals arriving to work in Shenzhen,” said Qiao, adding that a lack of affordable housing is affecting the city’s ability to attract top talent.

    He attributed the city’s skyrocketing home prices to limited land supplies and strong demand from local residents, especially young people, as Shenzhen has developed into one of the most competitive cities in the country.

    “Young people have developed strong purchasing power in Shenzhen, which has helped push up prices,” said Qiao.

    New-home prices in Guangdong Province increased a staggering 47.5 percent year-on-year in 2015, recording the sharpest home price increase for a Chinese city, according to official data released February.

    The sharp increase has resulted in “frenzy” buying from individual investors in Shenzhen, with some having bought houses by crowdfunding investment, according to local media reports.

    (SD-Agencies)