Shanghai, China
The Asset Management Association of China (AMAC) has prohibited the registration of private equity schemes intended for housing investments in 16 cities, where residential prices have sharply increased, reported Reuters.
According to a notice posted yesterday (13 February) on the organisation’s Wechat account, the places covered by the ban include Shanghai, Beijing, Xiamen, Shenzhen and Guangzhou.
It said the aim of this move is to prevent private equity investors from utilising trust and other funding services to finance the land acquisition and working capital of home builders.
Based on government data, property investments in China climbed by 6.9 percent last year, its largest annual gain in seven years. The authorities have also imposed restrictions on buying and owning properties to avert a sudden reversal in prices that could negatively impact the domestic economy.
Meanwhile, banks in some major cities are reducing discounts on the interest rates of housing loans for first-time buyers to tighten property sector credit.
Christopher Chitty, Senior Content Specialist, edited this story.
