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If downpayment requirements on property go up, will prices come down?

  • Published 14 Jan 2010

Beijing's regulatory changes, aimed at cooling the property market, are creating a stir with analysts debating whether enough has been done to prevent land hoarding.

Five Chinese ministries, including the Ministry of Finance and the Ministry of Land and Resources, issued a notice late last year requiring downpayments of 50% on the purchase of land, up from 20%. Full payments must be made within one year of the purchase. Shanghai property stocks have been falling since the announcement. Chinese economists are debating whether the new regulation will succeed in cooling the market.

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