The Chinese Central Government announced Friday that its definition of what constitutes a second home will be based on the number of homes owned per family, rather than by each individual. [Global Times]

The government announced Friday that its definition of what constitutes a second home will be based on the number of homes owned per family, rather than by each individual.

The policy will put an end to different definitions of second homes that various banks had been using when granting mortgages. However, market insiders said it will not be easy to secure buyers' full information, meaning prospective owners could find loopholes.

A family's actual total property holdings will be calculated by including the home ownership of the loan applicant and the applicant's spouse and minor children, according to a statement released jointly by the Ministry of Housing and Urban-Rural Development, the People's Bank of China and the China Banking Regulatory Commission.

The announcement also said banks should ask for higher down payments and mortgage rates if one of the homebuyer's family members already owns a property with an active loan.

However, insiders said the policy still has its holes in terms of securing buyers' information, and is not national in scope.

"The policy needs efforts from different departments, such as the household registration department, the housing management department and the property department, but buyers' information has not been shared among them," Shi Zheng, a consultant with Beijing-based Weiyan Property, told the Global Times Sunday.

"It is hard to check buyers' purchasing record currently if the family members are in different places," Shi added.

Chen Zhi, vice secretary-general of the Beijing Real Estate Association, shared Chen's opinion.

"The housing registration system has not implemented nationwide connections, and it is impossible to check buyers' purchasing records in other places," Chen was quoted as saying by Beijing Daily Sunday.

The government has instituted a series of tough measures in the property market since mid-April, such as raising the minimum down payment for second-home purchases to no less than 50 percent. A 70 percent decrease in commercial housing deals in some first and second-tier cities followed in May.

Figures from Shenzhen World Union Properties Consultancy show sales of new homes decreased 71.5 percent in Beijing and 67.7 percent in Shanghai from April 19 to May 30.

Li Xin, a manager of the personal loan department with Huaxia Bank, does not consider collecting buyers' information a big deal. "The bank staff can check the buyers' information on different websites. Once the government decides to (implement the rules), it will not take a long time, maybe three months will be fine," Li said.

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