China echoes Labour in its bid to burst housing bubble Beijing is barring single personal households from buying more than one residence, Shanghai has told banks to refuse credit to third-home buyers and both cities are also imposing a 20pc capital gains tax on property sales. There are parallels with the debate in Britain about the Government's attempt to boost the housing market, with Labour arguing that the Coalition's programme opens the door to the wealthy being able to buy second homes. China's housing problems are bigger and more complicated, with some activists questioning whether there is a bubble to burst in the first place. The rate of construction has seen homes built and left empty in some parts of the country while the authorities in Beijing and Shanghai are attempting to combat overcrowding and speculation. Prices in Beijing rose almost 6pc last month compared with a year earlier, the biggest increase in two years. Between 1998 and 2011, prices soared 160pc as the authorities relaxed controls and opened the market to private buyers. Yi Xianrong, a researcher at the Chinese Academy of Social Sciences said the action in Beijing "will help calm people's panic about house prices" . Housing inflation in Shanghai was running at 3.4pc last month. The city's administrators are increasing downpayments on house purchases and raising interest rates on second home mortgages. The action follows moves by Wen Jiabao, the former Premier, during his last days in office, to order the central bank to raise downpayments for second mortgages.