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China reigns in booming property market

China's government has taken steps to assert control over its domestic housing market in an attempt to keep control of the economy and discourage banks from building up bad debts.

The new measures brought in by the State Council include tighter lending standards and higher minimum down-payments. Banks will now have to insist on a 30% down-payment for mortgages rather than the current 20%.

Measures have also been taken against property speculators, such as imposing the full income tax rate on the sale of homes that have been owned for less than five years. Developers will also have to put in more of their own money, raising at least 35% from their own capital.

The reforms are intended to reign-in one of the most rapidly growing sectors in an overall rapidly-growing economy. The government intends to increase the amount of affordable housing in order to narrow the increasing gulf between rich and poor, but is also concerned that the increase in lending for mortgages and development will lead to a jump in bad debts.