China's G20 host city scraps stimulus policy to curb home prices: media

September 27, 2016 7:29 AM EDT

Employees set up model apartments as they prepare a real estate exhibition in Hangzhou, Zhejiang province May 17, 2012. REUTERS/Lang Lang/File Photo

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BEIJING (Reuters) - China's rising technology hub of Hangzhou will scrap a stimulus housing policy and raise the downpayment ratio for second-home purchases, state media said on Tuesday, in the country's latest move to curb fast-rising home prices.

Housing authorities in Hangzhou, the former G20 host city and capital of the eastern province of Zhejiang, announced on Tuesday they would suspend a housing policy that encourages home buying by giving non-resident buyers local household permits, effective on Wednesday, the Shanghai Securities News reported.

They would also increase the minimum downpayment ratio by 10 percent for second-time home buyers who still have unpaid housing loans.

Merely six months ago, Hangzhou announced that it would give migrant families local household permits, or hukou, to encourage them to buy homes in the city's four counties.

But relaxed housing prices across the nation and ample credit liquidity have quickly prompted home prices to soar in China's biggest cities, and a spillover ensued in major second-tier cities such as Hangzhou.

In an effort to deter speculators and to cool prices, housing authorities in Hangzhou last week said they would begin to restrict home purchases. Families which were not registered as residents and already owned one or more houses in certain districts would not be allowed to buy another home.

It also published new rules to restrict land sale prices on Monday, media reported.

Home prices in Hangzhou rose 22 percent on average in August year-on-year, according to China's National Bureau of Statistics.

(Reporting by Yawen Chen and Nicholas Heath; Editing by Nick Macfie)

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