China’s Beijing, Shanghai announced home mortgage policy relaxation to support struggling housing market

 

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China’s two largest cities Beijing and Shanghai on Friday announced that they would allow home buyers to enjoy preferential loans for first-home purchases regardless of their previous credit records, in the latest move to support the struggling housing market.

The capital city of Beijing would implement the eased rules immediately, while the financial hub of Shanghai scheduled the change for Saturday, according to local authorities of the two megacities.

The announcement came after the cities of Guangzhou and Shenzhen announced the similar relaxation of the policy for recognizing first-time home buyer status to enable more home buyers to enjoy lower dow payment ratio and home mortgage rates.

The latest move from Shanghai and Beijing means all of China’s first-tier cities have broadened the definition of first-home mortgage.

The moves after China’s financial regulators on Thursday cut the down-payment requirements for first- and second-time home buyers and lowered rates on existing mortgages, in a major move to halt a slump in the country’s residential property market.  Read more …

The minimum down payment will be 20% for first-time buyers and 30% for second-time buyers, according to a joint statement from People’s Bank of China and National Administration of Financial Regulation on Thursday. 

The central bank also approved a rate cut on existing mortgages for first homes, according to the statement. 

In the previous week, the central government allowed local governments to scrap a rule that disqualifies people who’ve ever had a mortgage – even if fully repaid – from being considered a first-time homebuyer in major cities. At least four major cities have since adopted it.