Beijing announced late Monday that it would further optimize its local property policies by taking measures such as reducing down payment rates for both first-home and second-home purchases, lowering the purchase threshold for nonlocal buyers and adjusting existing home mortgage rates, according to a notice issued by the Beijing Municipal Commission of Housing and Urban-Rural Development.
Some other large cities have also rolled out measures to make it easier for residents to buy homes. The move is expected to increase confidence in, and shore up the development of, local real estate sectors, industry experts said on Monday.
“Shanghai and Guangdong province’s Guangzhou and Shenzhen all unveiled new policies to further free up the property sector on Sunday night, reflecting their eagerness to solve their most prominent challenges in their real estate markets, which is in line with the top leadership of the Communist Party of China’s call for stabilizing the nation’s real estate market,” said Yan Rong, dean of the Shanghai Real Estate Science Research Institute.
“Out of comprehensive consideration and systematic planning, these policies will help boost market confidence and promote the stable and healthy development of their property markets,” Yan said, adding that the policies can serve as examples for other cities.
The Political Bureau of the CPC Central Committee held a meeting on Thursday, stressing that efforts will be made to stabilize the property market and reverse its downturn; adjust the restrictive policies of housing purchases; lower interest rates on existing mortgage loans; promptly improve land, fiscal, tax and financial policies; and promote the establishment of a new model for real estate development.
Finance regulators recently announced a set of related measures, including adjusting existing mortgage rates and optimizing personal home mortgage rates and down payments, experts said.
The People’s Bank of China, the country’s central bank, asked commercial banks on Sunday to lower mortgage rates for existing home loans to reduce the financial burdens on property owners, according to Xinhua News Agency.
The mortgage rates for first homes, second homes and others will fall by no lower than 30 basis points below the loan prime rate by Oct 31.
Against this backdrop, Shanghai took the lead among China’s top-tier cities to announce plans to optimize local property policies, including lowering the threshold for nonlocal buyers, reducing down payments for both first-home and second-home purchases and expanding value-added tax exemptions for home sales to better meet people’s living demands.
“The new policies focus more on meeting people’s requirements for better lives, tapping into differentiated demand for home living, as well as promoting a balance between working and living in key areas of the city,” said Cui Guangcan, director of the real estate and urban development center at Shanghai Normal University.
Both Guangzhou and Shenzhen also announced new property market measures on Sunday night.
In Guangzhou, all existing home buying restrictions were scrapped, making it the first first-tier city to lift home purchase requirements. Shenzhen announced plans to lower the minimum down payment for first homes to 15 percent of the purchase price, and for second homes to 20 percent.
The policies are an adequate response to the top leadership’s requirements for the nation’s largest cities to address people’s concerns by easing policies that restrict home purchases, said Li Yujia, chief researcher at the Guangdong Planning Institute’s residential policy research center.
“As October is a conventional home transaction season, it is hoped that the policy adjustments will boost market expectations, promote transaction volume and stabilize first-tier cities’ home markets,” the researcher said.
wang_ying@trulynews.cn