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And in China, homebuyers in 21 cities are now barred from purchasing as many new homes as they want. The Chinese cities have issued rules limiting real estate purchases as the central government struggles to avoid a housing bubble. NPR's Anthony Kuhn reports from Beijing.
ANTHONY KUHN, BYLINE: Wang Yongbo is a 30-year-old financier. He was planning to buy two homes in the city of Wuhan, both as investments. But last week, the Wuhan government rolled out new rules. Wang read the news online.
WANG YONGBO: (Foreign language spoken).
KUHN: "I take a few days off for the National Day holiday," he says. "I come back, and I'm disqualified from making the purchases." Under the new rules, Wang would have to pay 30 percent upfront for his first home purchase and 100 percent for his second. The new rules bar him from purchasing a third home. Wang doesn't want to park his money in the bank, so he's scouting for properties in other cities.
WANG: (Foreign language spoken).
KUHN: "If I had other options, I might not buy these homes," he explains. "But right now, there are no other assets to invest in." China's stock markets tanked last year. And some economists worry that real estate is the last gamble for investors and the next bubble to pop. By one estimate, home prices in a hundred Chinese cities rose by 15 percent in the first nine months of this year, a lot of it fueled by easy mortgage lending. In the city of Shenzhen next to Hong Kong, prices were up 60 percent last month year on year. Yan Yuejin is a research director at E-House, a Shanghai-based research firm. He says he's not worried that the market will suffer a catastrophic collapse.
YAN YUEJIN: (Through interpreter) Normal demand for housing is still very strong, stronger than the demand from speculators and investors.
KUHN: Yan argues that far fewer Chinese citizens actually own their own homes than media reports suggest. And he doubts that the new rules rolled out by cities will knock the wind out of home prices.
YAN: (Through interpreter) They're not trying to depress housing prices so much as they're trying to reduce debt in the housing and land markets.
KUHN: Yan predicts that rural residents moving to the cities will keep demand for housing steady for a while. The challenge for China will be to create new industries. Until that happens, he says, China's government will remain dependent on the housing market to keep its economy growing. Anthony Kuhn, NPR News, Beijing.
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