The city authorities said that, effective from Sept 19, homebuyers without household registration in the city－known in Chinese as hukou－are not allowed to buy a second home in the city's central districts, in a bid to curb rapidly rising house prices, curb speculative buying and prevent risks.These restrictions were tightened again on September 26, with total ban on non-resident buying, touching off a housing frenzy in Hangzhou.
More buying restrictions were added today. FT: China cities move to halt housing market frenzy
Hangzhou, host of this months’s G20 summit, on Tuesday introduced rules requiring buyers at auction of high-priced land to pay the full amount within a month, a move aimed at reining in China’s infamous “land kings”, developers prepared to pay above the market rate during pricing booms.According to iFeng, the city will also no longer issue residence permits to home buyers, as well as hike down payments to 50 percent for buyers who already own a home. 再出重拳！杭州宣布暂停购房入户政策
Caixin: Hangzhou Puts Lid on Bids for Land
Authorities in Hangzhou, the capital of Zhejiang province, said Monday that parcels of land in 10 out of the city's 12 districts cannot be sold for more than 150 percent over their initial bidding prices. Once the bids for a plot reach the maximum price, the plot will go to the developer who promises to build the most number of elderly-care facilities on the land, according to the new rule, which went into effect Tuesday.The moves come in the wake of People's Daily editorial calling for sanity in the housing market: Commentary in China’s mouthpiece media seeks to calm property speculation, draws online derision instead
An opinion piece carried by the website of the communist party media flagship on Monday night said hard work is more meaningful than profiting from property deals.That's an unfortunate line because it came around the same time as this article: 见证楼市疯狂：房价1年涨幅顶家庭10年收入. The headline says the past 1 year of home price increase is equivalent to 10 years of household income. It discussed people closing their factories to flip houses. It isn't a fictional story, it's a reality repeated all over China.
The source of the devaluation is not the home prices though, it is currency devaluation. Inflation has greatly reduced the value of the yuan and it is expressing itself in soaring property prices. Every credit fueled bubble is the same, with people abandoning real work in order to trade the speculative asset du jour.
“When hard work is deemed inferior to property speculation, it can lead to a wrong direction and values,” the author Li Zhen wrote. “If the public spend too much time on short-term benefits from speculating on properties, it will squeeze out the desire to fight for long-term goals.”It's called malinvestment. The market is sending the wrong signals because central planners have completely destroyed market signals across the world. China is destroying its economy, consuming wealthy in order to produce an extra 1 to 2 percent of GDP in order to avoid the painful, but necessary, recession that will clean out the bad investments.
One popular comment that was liked by close to 1,000 readers said, “Didn’t People’s Daily get it the wrong way round? It is ridiculous that home prices make our hard work meaningless.” Another widely shared comment said, “These words sounds good to the ears, but those who say them are not good people. Most people spend their lives working hard but eventually lose their earnings to high taxes and rocketing home prices. Policymakers don’t try to reduce the tax. What’s the point of talking about all this trash? ”The official panic has begun, as have the stringent buying restrictions and credit restrictions that will lead to the next crisis.