State Council, Circular on Determined Suppression of the Exceedingly Rapid Rise of Certain Urban Housing Prices

Issued: April 17 2010

Main contents: The Circular states that where a family (including the borrower, spouse and minor children) purchases its first unit of self-occupied residential premises with a floor area of 90 square metres or more, the down payment may not be less than 30% of the mortgage loan. Where it purchases a second unit of residential premises, the down payment may not be less than 50% of the loan, and the mortgage interest rate may not be less than 1.1-times the benchmark interest rate. In regions where the prices of commodity residential premises are exceedingly high or rising too rapidly, or where property is in short supply, commercial banks may suspend the grant of mortgage loans for purchase of a third unit or more of residential premises according to the risk position, and for non-local residents failing to provide at least one year's proof of local tax payment or social insurance contributions (Article 3).

Idle land that is recovered shall be used in priority for building ordinary residential premises. Land use for welfare residential premises, rebuilding of shanty areas and small- and medium-sized ordinary commodity residential premises shall be prioritised and be no less than 70% of total land supply for construction of residential premises. In regions where the property prices are exceedingly high or rising too rapidly, the supply for public residential premises for lease, economically affordable residential premises and commodity residential premises with a price ceiling shall be increased considerably (Article 6). The Circular also stipulates that 3 million units of welfare residential premises and 2.8 million residential units from rebuilt shanty areas shall be completed in 2010 (Article 7).