The more stringent credit control over second and multi-home mortgages has slowed the rise in Shanghai's second-hand housing index last month, the local index compiler said yesterday.
The index, released monthly by www.ehomeday.com and tracks prices of used apartments across the city, advanced 1.5 percent to 2,217 in December, the smallest increase since June 2007.
"The clarification of a second and multi-mortgage made jointly by the People's Bank of China and the China Banking Regulatory Commission on December 11 has somewhat curbed some home buyers' demand," said Chi Shengyu, an ehomeday analyst. "A higher threshold for down payment and increased interest charges has hampered some home purchase plans by both speculators and end-users."
The second or multi-mortgage has now been defined as a family unit, including spouses and children, the central bank and the CBRC said.
Mortgagees who apply for another home loan are required to make a down payment of at least 40 percent and pay a 10-percent premium on interest rates, and the requirement on a third or fourth mortgage is stricter.
The requirement on the first mortgage, meanwhile, remains unchanged - up to 30 percent downpayment and a 15-percent interest discount.
Citywide, second-hand apartments in prime areas led gainers in December with those in Nanjing Road E., Huaihai Road, Jing'an Temple and West Nanjing Road jumping 7.76 percent, 6.26 percent, 5.91 percent and 5.86 percent, respectively.
Due to the rapid expansion of the city's metro network, prices of second-hand houses in Kongjiang, Zhongyuan, the North Bund and Pudong areas all rose significantly over the past month at 4.67 percent, 4.46 percent, 5.18 percent and 4.09 percent, the compiler said.
The local rental index, which is also compiled by the website, also rose when it added 0.6 percent to 1,123 last month but the performances in different categories were mixed.
The average rent for high-end apartments, which usually goes for more than 6,000 yuan (US$820) per month for a two-bedroom apartment, gained 0.4 percent, with Zhenning Road and Gubei areas being among the major gainers.
(Shanghai Daily January 15, 2008)