Beijing has prohibited real estate developers to launch any new residential projects in Dongcheng and Xicheng districts, the core areas of the city, Since Finance reported.

According to the category of Prohibitions and Restrictions on New Industries in Beijing, residential projects with a floor area ratio below 1.0 which are generally classified as villa-like projects, will be banned.

New large-scale public construction projects such as hotels and office buildings are also banned.

Also, it is not permitted to set up a centralized office area where the real estate leasing business concentrates within the city.

Insiders think such a ban will push real home buyers back to the second-hand housing market, which could rekindle the sector.

And with no corresponding policy to dampen the price of second-hand housing, home prices could potentially get out of control driven by an increasing number of potential buyers.