THE IMPACTS OF ANTI-SPECULATION POLICIES ON HOUSE PRICE MOVEMENTS: THE CASE OF GUANGZHOU, CHINA

The Chinese government implemented a new regulation in April 2010 for the purpose of regulating and suppressing real estate speculation and maintaining a healthy and sustainable housing market in the long term. This policy proposes to increase the minimum down payment for purchasing second homes. First-home buyers must deposit a minimum of 30 percent down payment for purchasing properties of over 90 square meters. Buyers of second homes with areas less than 90 square meters must make a minimum of 50 percent down payment, and loans for the purchase of third homes have been temporarily suspended. The impacts and effectiveness of the policy were challenged and argued about by various groups associated with the housing market. This paper studies the results of a survey on the impact of the new regulation. The market performance is then analysed using the case of Guangzhou. Finally, elements that affect house prices and the future direction of house prices will be estimated from the demand for and supply of housing in the marketplace. The study suggests that the new regulation is effective in preventing speculative activities and that house prices in Guangzhou will decrease in the short term