China has approved new measures for the real estate market in Shanghai, requiring buyers to make a down payment of at least 35 per cent, state-owned Xinhua agency reports.
Those buying a second house will need to make a down payment of 50 per cent, while down payment for commercial properties will be 70 per cent, Shanghai’s banking and real estate authorities announced.
Home buyers will not get a mortgage if it exceeds 40 per cent of their income, a measure to ensure solvency.
Banks will also increase interest rates by 10 per cent for home buyers borrowing from the government’s Housing Provident Fund for the second time, and the maximum sum will be lowered by 100,000 yuan ($A19,407).
Moreover, people with two mortgages will not be able to apply for these loans.
Banking entities will also strengthen measures against falsification of documents for people looking to buy properties for speculative purposes.
Shanghai, which earlier tried to rein in its real estate market around the beginning of October, once again attempts to tackle sharp hikes in housing prices in recent months owing to easy access to loans and speculation.
Many Chinese cities including Beijing, Tianjin and Nanjing also introduced similar restrictions last month, which resulted in a decrease in sales.