On November 28th 2016, the Shanghai Housing and Urban-rural Construction Management Committee together with the People’s Bank of China Shanghai Branch, and the China Banking Regulatory Commission Shanghai Authority issued the Circular on Further Improve the Differentiated Housing Credit Policy to Promote the Steady and Healthy Development of the Municipal Real Estate Market (hereinafter referred to as the Circular).
The Circular redefines the concept of “first house”: comparing with the previous policy, the new concept of “first house” not only means that you do not have a house under your name, also means that you have never had any record of commercial housing loan or housing provident fund loan. Where the above conditions for first house are met, the rate of down payment of the house can be as low as 35% of the entire house price. However, if unfortunately you cannot meet the aforementioned conditions at the same time, for buying an ordinary house, the rate of down payment of the house shall not be lower than 50%; for buying a non-ordinary house, the rate of down payment of the house shall not be lower than 70%.
In the current real estate market of Shanghai, an overwhelming majority of the houses shall be classified into non-ordinary house, which means that most house buyers are facing a higher rate of down payment.
The precipitate policy makes some buyers breach their sales and purchase contracts due to their incapacity to get a bank loan after the new policy takes effect.
This news reflects for sure the strong determination of the Shanghai government to control house price and will affect many people. For any further detail, write to firstname.lastname@example.org