* Could raise minimum downpayments, loan rates for 2nd homes
* Local govts must set home-price control targets in Q1
* Property tightening campaign seen at critical stage
BEIJING, March 1 China could increase required
downpayments and loan rates for buyers of second homes in cities
where prices are rising too quickly, the State Council said on
Friday in the central government's latest move to contain
Local governments must set home price control targets in the
first quarter, the central government said in a statement on its
The State Council, China's cabinet, on Feb. 20 restated its
intention to extend a pilot property tax programme to more
cities and urged local authorities to put price-control targets
on new homes, in an effort to calm real estate
"Currently the property tightening campaign is at a critical
stage, sentiment on rising home prices have strengthened,"
Friday's statement said.
In February, average home prices in China's 100 biggest
cities rose for the ninth straight month although the pace of
increase slowed, a private survey showed on
Rising home prices have reignited concerns about property
inflation and analysts say local governments may announce plans
to tighten property purchases after Beijing reiterated its
pledge to calm the house market.
Currently, minimum downpayments for second homes are 60
percent of a home's value while mortgage rates for such
purchases are 1.1 times the central bank's benchmark interest
SPECULATION IS RIFE
Beijing has instructed banks to prioritise and assist
first-time home buyers to help keep a lid on social discontent.
China's property market is rife with speculation about house
prices and about what the country's new leadership may do to
curb them once it takes office next week.
Economists at state-run think-tanks believe investors are
right to be worried that the government is preparing to widen a
pilot property tax as part of broader reform of land and fiscal
Sun Xuegong, an economist with a think-tank under the
powerful National Development and Reform Commission, told
Reuters this week that China urgently needs a blueprint to
stabilise the real estate market. He said that Xi Jinping and Li
Keqiang, set to take over as president and premier,
respectively, at China's annual parliametnary meeting from March
5, would not shy from delivering one.
Hui Jianqiang, the research head at E-House China, a real
estate information provider in Shanghai, said Friday's State
Council statement is more detailed than the sketchy guideline
issued on Feb. 20 "but it is still difficult for now to quantify
the effect of the policy."
(Reporting by Xiaoyi Shao, Aileen Wang and Nick Edwards;
Editing by Richard Borsuk)