China’s Hainan cuts down payment for first-home buyers

CHINA’S southern province of Hainan moved to cut down-payment ratio for first-time homebuyers, the latest region in the country to ease mortgage policies to boost slumping home sales.

Minimum down payment for first homes was cut to 20 per cent from 25 per cent, according to a Monday (Feb 19) report by Hainan Daily. The ratio for second homes remains unchanged at 30 per cent, the outlet reported, citing a government notice without saying when the measure would go into effect.

The move comes after Chinese authorities in December relaxed homebuying curbs in Beijing and Shanghai, extending efforts seen in other cities to stem an unprecedented housing downturn. Home sales in the two mega cities surged that month after they reduced down-payment ratios and eased the threshold for some types of housing to be qualified for lower mortgages.

Sales in China’s new-home market remained subdued despite a jump in transactions of existing homes during the week-long Spring Festival holiday this month.

Daily average sales of new homes shrank 27 per cent by area from a year earlier, according to a tally on 25 major cities tracked by China Index Holdings.

Hainan, China’s southernmost province with a 10 million population, eased ratio for first homes from 30 per cent to 25 per cent in October.