In contrast to anything that was done in the United States during the run of the current housing bubble, China raised mortgage interest rates to counter property speculation that is driving up home prices.
Authorities have announced a string of measures intended to cool surging property prices and discourage speculative investments.
Property prices jumped 8.2 percent in August from a year earlier after gaining 7.5 percent in July, according to government figures. The rate of increase in China’s major cities, such as Shanghai and Beijing, has been even steeper.
It looks like citizens of China are drinking the American Kool-Aid too!
Buyers of second residential properties are also required to make minimum downpayments of 40 percent, up from the previous 30 percent, said the People’s Bank of China in one of the postings on its Web site.
I could only guess that had downpayments of 30% been required on second homes in the United States, home prices wouldn’t have gone up the way they did. It will be interesting to see if this really does have any effect on curbing prices. I wonder if China has late-night infomercials telling people how they can build million dollar real estate portfolios with no money down!