China Gets Even Tougher on Real Estate InflationPosted: April 19, 2010
Reuters reports that “China Steps up Fight Against Property Speculation“:
“Provincial and municipal governments in areas experiencing rapidly rising property prices may temporarily restrict the number of properties people may buy, in accordance with the situation in their jurisdictions, the State Council said.
The measures also made clear to banks that they would be expected not just to raise mortgage rates and down payment requirements, but to refuse credit to people who are clearly buying homes for speculative purposes.”
Specifically, banks are being asked to increase down payments and mortgage rates for people who already own two homes or more.
Apparently, China has a working definition of an asset bubble and is getting increasingly proactive about preventing (or slowing down) rampant asset inflation.