Homeowners who wish to upgrade to more spacious or better-located properties are among those most impacted by the recent tightening of China's home purchase rules.

Such prospective homebuyers are required to make higher down payments in key cities now.

Property agents said purchase restrictions not only squeeze out speculative demand but help some homebuyers to reduce financial risks, making them more cautious and prudent.

Ma Chengbing, an agent with Beijing-based Zhongzheng Realty Agency, said many prospective buyers of second homes, particularly young parents, eye better public resources and conveniences to enjoy a better quality of life.

So, apartments in, say, central districts of the capital typically enjoy hot demand, given their proximity to renowned hospitals, famous schools, shopping areas, parks, lawns and riverside walks.

For their part, retirees and those on the verge of retirement also prefer such areas, in order to live with their children and grandchildren - more so if their children are young parents or are about to become parents.

"But now, for many buyers, affordability is the only factor for decision-making. Some of those upgrading are dropping their plan simply because they can't afford to make higher down payment. Also, some buyers who wished to sell their first home and then buy a second one are hesitant because they are not sure if the family income will be stable and steady enough to cover the monthly installments related to a more spacious home," said Ma.

Sun Ailian, 56, a retired high school teacher in Shanghai's Baoshan district, said she is reconsidering her plan to buy a second home in the city.

"In the past when I made plans to buy a new home, I'd focus on just buying one. But now, I need to really think about affordability; the financial burden on me would be immense. My children need to ponder if it would be worthwhile to shoulder the burden.

"Some of my friends bought new homes, but cut down on spending on other items. They don't travel or dine out any more like in the past, simply because they have to pay installment every month, up to 50 percent of their household income.

"I don't want to be in such a situation. More subway lines are expected to run near my current home. More shopping malls and hospitals have opened in my neighborhood of late. So, there may not be any urgent need to move to a central district."

Supplies of higher-end homes are unlikely to increase quickly in key cities in the short term, but more public resources offered at sub-prime locations are likely to help meet more residents' demands for better housing and living conditions, said a research note from Beijing-based B. A. Consulting.

"Homebuyers may evaluate a property in the context of urban planning and economic growth of a given region. If the region has a long-term plan for upgrading its public facilities and has strong potential for economic growth, the property will actually be 'upgraded' in alignment with the region's development," said the research note.

wuyiyao@chinadaily.com.cn