Used home prices in China's major cities have shown signs of decline after local governments introduced a slew of regulations to tame their markets, the Yangcheng Evening News reported.
In Shanghai, the number of prospective buyers has dropped significantly as non-local buyers are required to pay income tax and social security premiums in the city for five consecutive years, up from the previous requirement of two years.
The local government also raised down-payment requirements for second home buyers, which prompted a villa owner to lower his property's price overnight by about 1.6 million yuan (US$ 247,360) from the original 11.5 million yuan (US$ 1.18 million).
Shenzhen's housing market is also cooling off. A research team with Minsheng Securities estimated that home prices in the city might decline between 20 percent and 25 percent by the end of this year.
This view was echoed by local real estate brokers. "It has become difficult to sell houses after the Spring Festival," said an anonymous broker. He got a monthly bonus of nearly 100,000 yuan (US$ 15,460) last year, but couldn't strike any deal in March.
The local government in Beijing hasn't issued any regulations yet, but it has kept a close eye on the market and is ready to take action at any time to prevent the market from overheating. Under such circumstances, many real estate agencies have stopped selling the outrageously expensive homes in popular school districts, an industry insider revealed.
Of the top-tier cities, Guangzhou is the only one seeing reasonable market growth. Despite a large increase in transactions, the city hasn't seen a sharp rise in home prices.
In February, Shenzhen reported the sharpest rise -54.2 percent since last year - in used home prices among all major cities in China. It was followed by Shanghai with an increase of 20.3 percent.