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China property
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Shanghai, Shenzhen lead China’s biggest cities in latest clampdown on housing market speculation after bubble warning

  • Shanghai, Shenzhen and Hangzhou have further tightened rules to plug loopholes, dampen speculation after bubble warning
  • New rules follow measures since August when state officials began setting leverage thresholds for indebted developers

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Shenzhen’s skyline in the Greater Bay Area. The Silicon Valley of China has taken measures to cool home prices over the past few months. Photo: Martin Chan
Pearl Liu
Some of China’s biggest and most affluent cities have introduced new administrative measures to stem runaway home prices, after a top banking regulator flagged concerns about a bubble in the domestic real estate market.
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Local authorities in Shanghai, Hangzhou and Shenzhen imposed new market curbs on Wednesday, including a ban on flipping homes for a quick profit and more stringent qualification criteria for first-time buyers, according to notices published on their websites. The new measures added to steps over the past few months since authorities in August issued so-called three red lines on corporate leverage in the industry
The move came a day after Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said he was concerned about the bubble in domestic real-estate prices, which could threaten China’s financial sector and economic stability.

“Many people buy homes not to live in, but to invest or speculate,” he said, likening the property market leverage to a “grey rhino” risk to the broader economy. “This is very dangerous.”

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Shanghai, the country’s commercial and financial hub, banned homeowners from reselling their new homes within five years, its housing watchdog said late on Wednesday. There were no restrictions on flipping them previously.

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Hangzhou, the capital of eastern Zhejiang province and home to some of the nation’s largest fintech groups, on the same day tightened rules on foreclosed homes. It stipulated that buyers must first be qualified to buy a residential home, before they are allowed to transact in such properties.

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