Beijing's policy on second apartment purchasing is having only a slight effect on the city's property market because more buyers are purchasing apartments for their own use instead of an investment, according to some industry insiders.

Visitors look at the display at a booth at the 2009 Autumn Real Estate Trade Fair in Beijing on Thursday, September 3, 2009.[CRIENGLISH.com]

The industry professionals along with many real estate developers and prospective apartment buyers were attending the 2009 Autumn Real Estate Trade Fair, which started Thursday in Beijing.

Visitors view models of apartment buildings at the 2009 Autumn Real Estate Trade Fair, which began on Thursday, September 3, 2009, in Beijing. [CRIENGLISH.com]

An IT engineer, who asked not to be named, told China Radio International that he bought an apartment for his own use several years ago, but now plans to buy a second apartment for his family rather than an investment since he now has a baby and needs a bigger place to live. He said he plans to apply for a bank loan to purchase his second apartment, although he heard that it is not as easy now to get a loan for that purpose.

The authorities have not made any adjustments to the second-apartment policy since it was issued two years ago, according to a statement released by the China Banking Regulatory Commission (CBRC) this July. The central bank issued a loan policy on purchasing second apartments on September 27, 2007, to prevent real estate speculation. The policy raised the down payment for mortgages to 40 percent for second apartments. The interest rate on mortgages for second-apartment buyers was also increased to 1.1 times the benchmark one-year lending rate.

But some real estate industry insiders at the fair said they did not believe the new policy would have a big effect on Beijing's property market.

Hou Xiaopeng, a property consultant with 5i5j, a chain of property agencies in Beijing, pointed out that the volume of housing sales in August had dropped because of soaring house prices.

"For most people, buying an apartment is necessary to satisfy their basic living needs, but not as an investment," Hou said.

The second-apartment policy appears to be having little impact on those who continue to buy apartments for investment purposes, he added.

A young woman, who asked not to be named, said she has made a considerable amount of money from investing in real estate. When asked whether the second-apartment policy would have an effect on her future investments, she said she would consider paying the full amount for new apartments upfront if the prices were not too high.

(CRIENGLISH.com September 4, 2009)