Shanghai authorities have imposed limits on home buying in an attempt to cool the city's property market. Families in Shanghai will temporarily be allowed to buy only one more home, and banks must restrict mortgages. It follows moves by the central government to curb property speculation on the back of big price rises. Earlier this week, authorities in Shenzhen announced that anyone owning two houses or more would be stopped from buying further properties. The Shanghai regional government said it would limit the amount of mortgages banks can issue, and that it is preparing to trial the launch of a real estate tax. The authority said it had ordered banks to suspend loans for third-home buyers and that it will further regulate the operations of property developers. No details were given about how long the buying rule would be in force. The act follows the April announcement where by the Chinese Gov introduced a series of new regulatory restrictions on the housing market that sought to restrict speculative buying. These included higher down-payments on house purchases, stricter lending rules for property developers, and limits on the ability of investors to buy more than one home. Many economists, investors and policymakers - both inside and outside China - worried that Chinese real estate may be experiencing a bubble brought on by excessively low interest rates, which has fuelled speculators. Financial markets are now assessing whether Beijing will successfully pull off a soft landing in housing prices, or whether the Chinese property market will now deflate in the same painful way the US market has done since 2007. The property market restrictions are just one dimension of a general move by Beijing to cool the economy down, in the face of accelerating inflation. The Chinese government had encouraged an unprecedented expansion in bank lending last year in order to weather the global recession. Now it wants to stop that expansion.