The China Banking and Regulatory Commission (CBRC) announced Thursday that it will strictly enforce previously relaxed restrictions on secondary home purchases, the South China Morning Post reported. While a rule passed two years ago requires purchasers of second homes to put up a down payment of 40% of the property’s sale value, in practice local governments reduced the ratio to 30%. Combined with the economic stimulus package, the result has been a surge of homebuyers returning to the market, prompting fears of a new property bubble. However, following the official announcement, and communications from Beijing to local bank branches, local banks have already begun to resume application of the 40% standard, causing a decline in transactions in some markets.
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