Shenzhen has become the first city in China to respond to the central government’s latest measure to curb property prices by limiting households with residency status to acquire only two homes.
People living without residency status in Shenzhen, China will not be allowed to purchase any additional homes but may acquire a single home unit if they can present proof that they have paid tax or contributed to the social security fund for a year.
Several property agents said that the tightened measure will likely affect Shenzhen’s housing demand, as over 16 percent of workers in Shenzhen are immigrants who have not been granted residency status.
Samuel Wong Shu-kuen, head of property agent Midland Realty’s Shenzhen office, said: “I have been working in Shenzhen for more than 10 years. This is the toughest measure I have ever seen.”
He stresses that the new measure would cut home demand and substantially hit sales volumes.
Mr. Wong expected that home sales volume in Shenzhen could plunge 50 percent from the last month, with nearly 11,000 registered sales of second home purchases that were recorded last month.
The central government recently implemented the latest series of cooling measures and said that provincial and city governments should evaluate if property prices were increasing rapidly in their jurisdiction, and if so, should put limits on the number of homes that a single family could purchase.
“Prices in Shenzhen have probably gone up by 15 percent since April,” said Mr. Wong.
Other cooling measures implemented by the central government included the raising of down payment requirement for first-time homebuyers from 20 percent to 30 percent; suspending the third-home loans, and ending personal income and favourable deed taxes.