Categorized | International

China Announces Plans to Limit Mortgage Loans to International Investors

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China’s government is taking further action to prevent growth in its real estate market. As part of their commitment to reduce home prices, the Chinese government has announced that they will be enforcing a new restriction that severely limits the buying power of international investors in the nation’s residential real estate market.

Their most recent restriction denies foreigners access to medium and long-term mortgage loans. This property curb isn’t the first to target foreigners, who were also the subject of another restriction imposed in November. That restriction required first-time foreign homebuyers to prove that they have been employed for at least a year in China, and that they do not own any other properties in the nation.

Foreign buyers do not make up a huge segment of the buyers in the residential real estate market. However, the Chinese government believes that if they can reduce the buying power of foreigners, then they will be able to have better control over the property market as a whole.

For more than six months, the Chinese government has imposed a variety of property restrictions intended to reduce home prices and prevent the formation of a housing bubble. Housing prices have now fallen for a few consecutive months, and analysts believe that they will continue to decline.

Despite the declines, the government in China is looking to see further reductions in pricing, and is considering additional measures to make sure that prices continue to fall. There has been no timetable set regarding when the restrictions will be lifted.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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