As Shanghai property prices continue to rise, city officials are eyeing to implement stricter financing measures for both homebuyers and developers in line with efforts to cool down the real estate market. 

Among the policies being mulled by regulators is increasing payments for first-time home buyers from the current 30 percent to 50 percent, and raising charges by 70 percent for those who applied for mortgages, according to a Bloomberg report via the China Daily.

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Analysts expect such measures that aim to cut property prices in Shanghai to be in place soon, although the city's housing and construction authorities have yet to give their comments on the Bloomberg report.

The move by Shanghai officials to curb escalating property prices follows the decision of neighboring cities such as Nanjing to set limits on land auction prices.

According to Shanghai authorities, the details of these price-cutting policies are still under discussion.

Prior to the implementation of these measures, the city government has already tightened the approval criteria for non-resident homebuyers by raising the down payment requirements for some second homes, while banning unregulated lending for home-buying.

This move resulted in a drop in property sales volume in April and May, but eventually recovered in June as home purchases regained momentum.

According to Savills East China research, the average transaction prices for property in Shanghai continue to increase, rising by 2.7 percent quarter-on-quarter to 35,500 yuan ($5,530) per square meter in the second quarter.

"A strong residential sales market has encouraged developers to bid aggressively for new residential land plots, pushing land prices and premiums to new heights and fostering the expectation of further residential price growth as developers push costs on to eventual homebuyers," noted James Macdonald, a Savills Research analyst, in a recent residential property report.

Only recently, the auction for four land parcels in Shanghai were put on hold, a development that is viewed by market players as a strategy by city officials to curb skyrocketing property prices. 

Tagschina, Shanghai Property Prices, Shanghai Property