Beijing becomes last mega China city to ease housing rules
CHINA’S capital city of Beijing eased homebuying requirements for a downpayment and mortgages, joining the country’s other megacities to support the real estate sector.
Beijing reduced downpayment requirements by 10 percentage points to a minimum of 20 per cent for first-time buyers, the capital city said on Wednesday (Jun 26). For second homes, the threshold is lowered to a minimum of 35 per cent for urban areas and a minimum of 30 per cent elsewhere. The city also lowered the floor on mortgage rates.
China’s three-year housing slump has pummelled the economy and continues to afflict even its biggest urban centres. Investors and analysts remain sceptical that existing measures will be sufficient due to the limited central bank funding revealed so far and the slow progress of existing trial programmes in several cities.
China’s three-year housing slump has pummelled the economy and continues to afflict even its biggest urban centres. Investors and analysts remain sceptical that existing measures will be sufficient due to the limited central bank funding revealed so far and the slow progress of existing trial programmes in several cities.
Beijing also eased home-buying rules further for families with at least two children. Such families can enjoy a downpayment threshold and mortgage rates applied for first-home buyers even if they are purchasing their second residences.
Beijing faces the worst oversupply among 30 major cities tracked by China Real Estate Information Corporation (CRIC). Its new home inventory needs 48.9 months to sell, CRIC estimated before the easing announcement. The capital’s new-home prices slumped 1.1 per cent in May, the worst drop in almost a decade, the latest official data showed.
Top policymakers urged officials in a Cabinet meeting earlier this month to keep an “open mind” over measures to reduce housing inventory and be more “creative and bold” in rolling out support.
It would take more than four years to offload the nation’s 60 million unsold apartments without government aid, according to Bloomberg Economics. BLOOMBERG
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