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Shenzhen applies the brakes to its runaway property market

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Shenzhen is introducing a series of measures to curb surging property prices, including raising the deposit requirement to up to 40 per cent of the value of the property.

Industry insiders say prices rose more than 20 per cent in the first quarter.

Although the measures revealed in a government proposal do no specify a new deposit level, real estate sources said the government intended to lift it to a maximum of 40 per cent for mass-market properties. Buyers of upmarket apartments who had previously owned property might be barred from taking out mortgages, the sources said.

The current downpayment requirement in the special economic zone is 20 per cent.

Other measures to cool the property boom include prohibiting developers from sitting on their land reserves and government moves to release more land.

The new measures are in line with a directive issued by the central government last summer on cooling the property market and are the first set of such rules to be released by Shenzhen.

Under the proposal, no more than 10 per cent of new land supply to be made available through auctions or bidding can be used for upmarket housing.

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