Rising housing prices and changing policies have brought both
angst and excitement to local homebuyers.
Many new buyers are talking to agents to revise contracts after
the local government recently announced that first-time homebuyers
can borrow up to 500,000 yuan from the city's housing fund from
September 1.
The loan, which carries a relatively low interest rate, is
currently capped at 300,000 yuan.
The new policy will be a relief for homebuyers that have to take
out hefty commercial loans to finance purchases.
Many of the city's homebuyers jokingly refer to themselves as
"mortgage slaves", because most of their salaries are used for loan
repayments. But this situation is not going to change much for
those who borrow under 20- to 30-year terms.
Many homebuyers have been waiting for the last two years for
prices to come down, after a number of policies were introduced to
rein in the red-hot property market.
But as housing prices in Shanghai and most Chinese cities
continue to rise, they could be waiting in vain. "And there is
absolutely no sign that the prices will go down," said Li Zong,
from a local real estate company.
"It actually costs more now to buy a small apartment in Pudong
because the price has shot up from 15,000 yuan per square meter
last year to 17,000 yuan," said Xiao Lu, a woman in her early
30s.
As housing prices continue to go through the roof, reports that
some cities might raise the down-payment ratio from 30 percent to
40 or even 50 percent are causing many to panic.
In fact, cities such as Shenzhen in Guangdong Province and
Wenzhou in Zhejiang Province have already tightened up lending on
home purchases.
But the Shanghai head office of the People's Bank of China has
dismissed any increase in the down-payment ratio.
Unlike Wenzhou and Shenzhen, banks in Shanghai have shown no
sign of cutting back on mortgages.
High land prices and the enthusiasm of local and overseas
investors in Shanghai's real estate market have pushed the city's
property prices, especially in the downtown area, to rise at a
rapid pace in the last few months and many believe it's set to
continue.
(China Daily August 22, 2007)
