Lin Hong was luckier than Wang. After braving the crowds at the transaction centers on March 24, she managed to secure the purchase of her family's second home and avoid the imminent down payment hike.
It helped that the transaction deadline for the day was extended from 9 pm to midnight because so many people were using the applications website that the system crashed.
According to the new policies, local families looking to buy a second home must provide a down payment of at least 50 percent of the total price. The figure rises to 70 percent if the house is more than 140 square meters, or costs more than 4.5 million yuan ($695,000) and is located within the inner ring road.
The same rules apply if the property costs more than 2.3 million yuan and is located beyond the outer ring. Before the policy was changed, the down payment on second homes was 40 percent.
Lin's second home is a three-bedroom house in the city's Qingpu district. It lies beyond the outer ring, so after the rule change the down payment would have been 70 percent, far beyond the family's means.
"It is hardly imaginable that white-collar people like us could make a down payment of 70 percent, as required by the new rules," she said.
The 31-year-old said her family started looking for a second home a year ago, and they were about to buy an apartment in the Gubei area in Changning district when the owner raised the asking price by 500,000 yuan.
"We thought that the prices for second-hand homes were insane. We later switched to looking at new houses in suburban areas instead," she said.
According to Gu Jinshan, director of the Shanghai Housing and Urban-Rural Development Management Committee, the surge in Shanghai's property prices started in the second half of last year, and was still growing by the beginning of January.
According to Gu, several factors drove the rise, such as relaxed policies on mortgages and new tax policies designed to benefit home buyers, a limited supply of homes, the return of investing and speculative demand, and the irregular practices employed by some property agencies.
Jiang Yizhen, an outlet manager with property consultancy Centaline in Shanghai, said that one of the most extreme examples of price hikes occurred in February before the Chinese New Year when a 102-sq-m unit in Yangpu district was priced at an unusually high 4.3 million yuan.
He said the owner raised the asking price every time a potential buyer agreed to the new price, and later learned that another property agency had managed to sell the apartment for 5.85 million yuan. However, in the wake of the new policies, some owners have already started lowering their asking prices, he added.
