Hefei to unveil new policies to rein in property market

Potential homebuyers examine a property project model in Hefei, capital of Anhui province, May 10, 2015.[Photo/IC]

New policies aimed at tightening the real estate market in Hefei, capital of Anhui province, have been finalized, and are expected to be unveiled soon, insiders told The Paper.

Hefei will unveil diversified credit policies rather than a purchase restriction policy, which come into effect beginning July 1, according to a government meeting held on Tuesday.

Under the new rules, for first-time home buyers the minimum down payment on a mortgage will be 25 percent. Those who already own a house must make at least a 40-percent down payment when applying for home loans.

Those who already own two houses or have two loan records must make a 60 percent down payment. Meanwhile, third-time homebuyers cannot apply for housing provident fund loans.

Also, land auctions will be changed to internet bidding from on-site bidding, in an effort to reduce human intervention.

Developers must pay 50 percent of the base price for deposits. They must pay off all the money in one month if the land price is less than 2 billion yuan, and in six months if it is over 2 billion yuan.

If a developer becomes the "lank king" at a land auction, it has to pay in one month, no matter how much it costs. "Land king" is a Chinese term that refers to a developer that has purchased land at record high prices.

After the property market craze took first-tier cities by storm, second-tier cities are now getting hit by the phenomenon - steep housing price hikes and flash buys of new houses and land.

At the sales office of a property developer in Hefei, a 150-meters-long line of home buyers, including 2,000 qualified buyers and 20,000 who bet on a chance to buy, crowded buildings for sale before 7 am.

The developer had to adopt a lottery to allot home purchasing qualifications. Twelve candidates emerged in every lottery round, who would earn one minute to choose a home.