An acquaintance of mine who moved to Beijing from Shanghai about two years ago was aghast when an 80-square-meter apartment in Wangjing, a neighborhood beyond the Fourth Ring Road in the capital, hit the market at a price of about 13 million yuan ($1.88 million).
On WeChat, he posted a photo of a sales chart in a real estate office, showing that larger units of about 200 square meters in the same new development were selling for prices ranging between 110,000 yuan and 130,000 yuan a square meter.
His posting was so surprising because it came just one day after Beijing's municipal government stepped in to impose the harshest restrictions to-date on home buying in yet another stab at reining in a red-hot housing market.
The restrictions come on the heels of the National People's Congress, which added language to its annual work report pledging to curb surging property prices in big cities.
Under Beijing's new rules, the minimum down payment for a second home was raised to at least 60 percent from 50 percent for what are classified as "normal" houses, and to at least 80 percent from 70 percent for those defined as "non-normal."
The city's definition for "normal" is based on the location of homes within the capital's ring roads. "Normal" ranges from 4.68 million yuan, or 39,600 yuan per square meter, within the Fifth Ring Road to those costing less than 2.808 million yuan, or 23,760 yuan per square meter, beyond the Sixth Ring Road. All other homes are deemed "non-normal."
In addition, people who already own a home in the city or who have ever applied for a mortgage loan from either commercial banks or public housing funds are now categorized as "second-time buyers," which puts an addition onus on their home-buying ability. It is a similar move to one adopted in Shanghai late last November.
The new rules stipulate that mortgage loans extended by either commercial banks or public housing funds must not exceed 25 years in duration. That compares to the previous maximum of 30 years.
Beijing was not alone in hitting the headlines across China. A wave of government curbs on buying property has swept the country.
At least half a dozen Chinese cities, including Beijing neighbors Shijiazhuang, Baoding and Langfang, Guangzhou, Changsha and Zhenzhou have slammed the brakes on home buying in the past week. Nationwide in March alone, more than 17 cities launched campaigns to let some air out of what is considered a dangerous market bubble.
