Three major Chinese cities to enforce new property cooling measures

BEIJING (REUTERS) - Beijing, Shanghai and Chongqing will implement strict property cooling measures as part of a central government crackdown on the overheated property market, state news agency Xinhua has said.

The move comes as the central government faces renewed pressure to stabilise skyrocketing home prices in several major cities.

Under the new measures, single Beijing residents will be prohibited from buying second homes, Xinhua said on Saturday.

The central government said earlier this month that in areas where property prices are rising too quickly, local governments must strictly enforce a 20 per cent capital gains tax and higher down payments for second-home buyers.

Beijing's municipal government said the tax could be waived if the family only owns one home and has lived in it for more than 5 years.

Shanghai municipal government said in addition to enforcing the capital gains tax, it would apply greater scrutiny to borrowers who come from other cities, are foreign or divorced.

The new rules will take effect on March 31, Xinhua said.

The municipality of Chongqing in southwestern China also said late on Saturday it would implement the new property cooling measures and ensure all districts are responsible for stable housing prices.

In 2013, Chongqing will also ensure that the supply of land for housing will not be lower than the average actual supply of the past five years.

China's southern province of Guangdong said on Tuesday it would work to implement the same directive, singling out four cities, including Guangzhou and Shenzhen, which have also seen home prices rise rapidly compared with other urban centres.

On a population-weighted basis derived by Reuters from official data, Beijing home prices jumped 21.8 per cent in February compared with a year earlier. Shanghai home prices were not far behind, gaining 14.6 per cent during the same period.

Year-on-year prices for new homes in China rose in February for a second consecutive month.