Economy

Migrant buyers blocked by tough new property policy

By Xu Fan (China Daily)
Updated: 2011-02-17 13:47

Homebuyers crowd the windows at Chaoyang district's Housing Registration and Certificate Issuance Center on Feb 15, with residents rushing to finish purchase procedures before Beijing releases its own regulations aimed at curbing housing market. The new regulations came into effect on Feb 17. [Photo /?China Daily]

Non-residents must live in city for 5 years to purchase home

Millions of migrant families in Beijing will be blocked from owning their own homes under strict new regulations aimed at cooling the capital's property market.

The rules, which take effect on Feb 17, state that families without Beijing hukou, or permanent residency, will need to have paid income tax and social insurance in the city for five years before they are allowed to buy.

"This means if they can't meet the demands, they can't buy a home," said Chen Zhi, deputy secretary-general of the Beijing Real Estate Association, the only governmental representative who attended Wednesday's press conference to give a detailed explanation of the regulations.

Experts say the article is being seen as the strictest and most influential part of the rules, which largely echo the central government's recent measures to curb skyrocketing housing prices on Jan 26.

Other changes will see families with hukou limited to owning just two properties, while the minimum down payment for second homes, which has already been raised from 50 to 60 percent, could see further hikes if Beijing's property market continues to "overheat", said Chen.

"The mortgage rate of second homes, which is 1.1 times higher than the benchmark, could be raised according to changes in the market," he explained. "The main target is to ensure the stability of real estate markets and try to guarantee genuine homebuyers' interests while cracking down on speculators."

The regulations will impact the city's migrant population. Statistics shows that 44.8 percent of homebuyers in January were from out of town, the highest ratio ever, Beijing Evening New reported.

Chen said foreigners will not be affected by the regulation. Rules currently state that expats in Beijing can buy a home on condition they prove they have worked or studied in the capital for more than a year.

Related readings:  Property developers raising cash abroad  Property developers raising cash abroad  Property tax rule pushing up cost of renting

Feng Xiaoyuan, a Chongqing-born animation designer who has worked in Beijing for three years, is among the millions of migrants who are concerned about the new changes.

"As I plan to get married next year, the new regulation disappoints me," he told METRO. "It means my partner and I can't buy our own home here. We have to live in a rented apartment and worry about the rising rent."

Pan Shiyi, a real estate tycoon and chairman of SOHO China, wrote on his micro blog that the "consecutive five-year" regulation does not only aim at curbing prices but may also alleviate conflicts between population expansion and shortages of natural resources.