China’s Shenzhen relaxes home buying rules to boost demand

[BEIJING] China’s tech hub of Shenzhen will ease home buying restrictions in the city’s prime districts and raise housing provident fund loan caps in the latest attempt by authorities to contain the nation’s prolonged property slump. 

Non-local households with a valid residence permit will be allowed to buy one commercial home in Futian, Nanshan and Xin’an Subdistrict of Bao’an starting from April 30, according to a statement from the local housing authority released on Wednesday (Apr 29). Previously in these prime areas, buyers need to have paid social security or individual tax for a year to become eligible for home buying.

Maximum housing provident fund loan caps will increase to 700,000 yuan (S$131,117) for individual applicants and 1.3 million yuan for joint applicants, the authority said. Loan limits may be increased by up to 60 per cent for first-home purchases, 50 per cent for households with a first child, and 70 per cent for families with two or more children, it said.

China’s property downturn has persisted for more than four years, weighing on the economy and sending cash-strapped developers into distress. China Vanke, once the country’s biggest builder, has been negotiating with bondholders to stave off the risk of default. 

China has doled out supportive measures in recent months. Beijing city further relaxed rules for non-resident homebuyers in December. The central government, meanwhile, lowered the value-added tax for selling residential properties owned for less than two years. BLOOMBERG