Market news :: Investing, Savings and Trading

Chinese cities restrict property purchases




FOUR Chinese cities have announced new restrictions on property purchases as the government tries to cool soaring home prices stoked by property speculators in second- and third-tier cities.

The measures in Chengdu, Jinan, Wuhan and Zhengzhou were the latest in a string of steps to tighten credit flowing into the property sector as the government tries to balance the need to prevent bubbles while stimulating economic growth. The spate of tightening measures during the past two weeks shows that Chinas top level may have reached consensus that the concerns about overheating in property market may have overshadowed the concerns about the economic slowdown, OCBC said in a research note on Monday.

The shift of policy tone also shows that China is unlikely to stimulate the economy further aggressively. This may not bode well for market sentiment in the longer run, it said.

Many mid-tier Chinese cities have become targets of property speculators looking for the next big thing beyond Chinas major cities. Other cities such as Tianjin, Hefei and Suzhou have also recently rolled out countermeasures to limit purchases as home prices jump.

The average new home price in 70 major cities climbed an annual 9.2 per cent in August, up from 7.9 per cent in July, according to data from Chinas National Bureau of Statistics.

Residents of the inland city of Zhengzhou who already own two properties and nonresidents who own one will now only be able to buy homes larger than 180sqm, according to a notice posted on the local governments website on Saturday.

In Chengdu, the capital of southwest Sichuan province, prospective buyers will be allowed to purchase only one property in certain city districts, and those buying their second property will need to place a down payment of no less than 40 per cent of the purchase price.

The Chengdu government also said it would penalise developers who were sitting on land without starting construction as promised and would clamp down on rumour-mongering in the property market.

The eastern city of Jinan said residents who owned three properties could not buy more and the increased deposit requirement for first homes to 30 per cent from 20 per cent, among other measures.

Residents of certain parts of the city of Wuhan, in the central province of Hubei, would be required from Monday to make a minimum down payment of 50 per cent to qualify for a commercial loan to buy a second home or 25 per cent for a first home, according to an announcement on a city government website. No loans would be given to residents for third homes.

Non-residents of Wuhan were ineligible for commercial loans for second homes in parts of the city and barred from buying third homes, it said. Home prices in at least one district in Zhengzhou, which became a symbol of Chinas property excesses because of rows of empty housing developments, have risen two-thirds this year to 25,000 yuan ($A4890) a square metre on average, a sales manager told Reuters on a recent visit to the city.

Mobile shopping set to surge so look out for savings




SHOPPING on smartphones and tablet computers is surging as these devices saturate the Australian consumer marketplace.

About nine out of ten Australians have a mobile device but many are still unsure about using it to make purchases even though it can save time and money.

Research group Telsyte says mobile commerce last year totalled $5 billion, representing 22 per cent of total e-commerce spending of $23 billion, and up from 16 per cent in 2014.

The expectation is that it should rapidly grow to half of all of e-commerce in the next couple of years, Telsyte managing director Foad Fadaghi says.

People are no longer distinguishing between buying on a computer versus a smartphone or tablet anymore its becoming the same activity for most people, he says.

Telsyte says the most popular products bought on mobile devices are cosmetics and beauty 38 per cent of all online purchases and clothing and footwear (36 per cent).

Both categories are very strong with the female population so its a critical channel for retailers, Fadaghi says. Building and renovation products are also popular, with 18 per cent of online purchases made on mobile devices.

Fadaghi says smartphones are owned by 84 per cent of Australians aged over 16 and tablets are owned by 63 per cent.

More people use smartphones than computers in Australia, and its only logical that more shopping will happen on those mobile devices, he says.

Its about getting over that initial trust aspect.

A new survey by finder.com.au found that 41 per cent of Australians would not use a smartphone app to buy goods, and half of those who would use it would not spend more than $100 at a time.

Finder spokeswoman Bessie Hassan says app developers are tightening security for online shoppers but users should still be vigilant.

Always logout when youve finished making a transaction and be as discreet about login details as you would be about your banking PIN, she says.

Once youre happy its secure, the savings using your phone or tablet can be significant.

Firstly, having the internet in your pocket is a great way to check prices offered by rival retailers to make sure youre getting the best possible deal.

Hassan says some retailers issue discounts for customers who make purchases online or with their phones or tablets.

Similar to having a physical loyalty card at your local coffee shop, some providers allow you to use your mobile to build up your payment history so that you can be rewarded with a free product or discount, she says.

Often, dedicated shopping apps deliver push notifications so you never miss a sale or promotion.

Fadaghi says smartphone shopping may be dangerously tempting for impulse buyers, and shoppers should always check whether an online purchase is still the cheapest once delivery costs are added.