The central government of China has ordered first-time foreign home buyers to present proof that they do not own other properties within the country, in a move to curb gains in the property market, said the housing ministry and currency regulator.
The State Administration of Foreign Exchange and the Ministry of Housing and Urban-Rural Development said foreigners will need to provide home ownership statements prior to their purchases, together with a proof of at least one-year employment in the country.
It said foreign companies are only permitted to purchase offices in places where they are registered.
Last week, the central bank of China raised bank reserve requirements to curb inflation and control foreign capital following the quantitative easing monetary policy implemented by the US Federal Reserve.
The central government has also suspended mortgages for third homes, tightened rules on down payments and raised interest rates for the first time in three years.
“This is certainly bad news for the property sector,” said Jinsong Du, an analyst at Credit Suisse Group AG. “The government may also impose rules to curb speculative money that may flow into the property sector.”
Previous measures to ease gains in the property market could not contain rising home prices, said Premier Wen Jiabao.
Mr. Du said the requirement for home ownership statements is a first for the country. Foreigners were previously able to purchase multiple properties in different locations because ownership records were kept locally, he said.
The newest measure is “in line with the belief that foreigners are responsible for driving up property prices”, said David Ji, head of Greater China research at DTZ Holdings in Hong Kong. “Maybe it’s a signal that all previous measures did not work,” he added.