Smaller cities to implement home buy limits

    Updated: 2011-08-17 16:05

    By Cai Xiao (chinadaily.com.cn)

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    Local authorities have been urged by the Ministry of Housing and Urban-Rural Development to implement restrictions on property purchasing in second and third tier cities, Shanghai Securities News said.

    Local governments in second and third tier cities have been asked to prepare reports on the condition of the city's property market by Aug 20. Insiders told the paper that the Ministry will launch the restriction policy by the end of August.

    The ministry outlined five standards and a city that meets two or more of the five standards will be required to implement the policy.

    Analysts predict that the launch of the new policy will suppress the rise in property prices during the period between September and October, a selling season for the sector. Similar to the gradual decrease in the number and price of purchased properties in first tier cities that have already implemented the policy, analysts anticipate a similar result for the remaining tiers.

    Analysts told the paper that enforcing purchasing restrictions is the most effective way for the government to regulate the property market. The restrictions vary according to cities.

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