Economic Watch: Major Chinese cities ease home-buying rules to stabilize property market

BEIJING, Sept. 30 (Xinhua) — Major Chinese cities of Shanghai, Guangzhou and Shenzhen have adjusted their real estate policies, with a slew of measures unveiled to boost local property markets.
The city of Guangzhou in south China’s Guangdong Province has lifted restrictions on buying properties.
Starting on Monday, qualifications for purchasing a home will no longer be reviewed and there will be no restrictions on the number of homes purchased by families and single individuals with or without local household registration in the city, according to a circular issued by the general office of the municipal government on Sunday night.
In Shanghai, the minimum down payment ratio for individual commercial mortgages will be reduced from 20 percent to 15 percent for first-home purchases, and from 35 percent to 25 percent for second homes, according to a circular issued Sunday.
Commercial banks will be guided to lower existing mortgage rates to further reduce mortgage interest expenditures for home buyers. Non-Shanghai residents will be allowed to purchase homes outside the outer ring road if they have a record of paying social insurance or individual income tax in the city for at least one year — down from three years as was previously required, the circular said.
The new measures will take effect on Tuesday.
With the reduction of the down payment, homebuyers will face much less financial pressure, said Sun Jinhua, a real estate agent with eight years of industry experience.
“Since late Sunday, I have been receiving a large number of inquiries, with many non-local buyers tending to act in response to the new policy,” Sun said.
Zhang Shaonan, who graduated and started working in Shanghai last year, said that upon learning about the relaxed restrictions on home buying, he plans to purchase an apartment outside the outer ring road.
“Since I no longer have to wait for at least three years to be eligible to buy an apartment in Shanghai, I have decided to buy a home and settle down first,” said Zhang, who is a non-local.
Also on Sunday, the city of Shenzhen in Guangdong Province announced measures such as reducing the down payment ratio and optimizing district-specific home purchase restrictions.
The latest measures follow a Thursday meeting of the Political Bureau of the Communist Party of China Central Committee, which underlined the need for efforts to reverse the real estate market downturn and stabilize the market.
Xu Shaoliang, a Guangzhou-based real estate agent, said ever since the meeting, he has received more inquiries and visits from clients.
“The potential buyers are primarily motivated by their basic needs or a desire to improve their housing situations, with far fewer looking to invest,” Xu said.
He believes that under these favorable policies, the real estate market will see positive changes.
Cui Guangcan, director of the real estate and urban development center at the Shanghai Normal University, noted that the new round of policies focuses further on the demand side, especially on the diverse and evolving housing needs of residents.
“The various measures adopted by multiple departments to optimize housing policies will help meet reasonable housing needs and improve the housing conditions of the people,” Cui said. ■