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The cities of Beijing and Shanghai on September 1 implemented the policy of using home ownership instead of mortgage records to determine first-time mortgage qualification, after the policy was earlier introduced in Guangzhou and Shenzhen.
As the difference in down payment ratios between the first and second home purchases in Beijing and Shanghai is relatively large, the impact of the policy is expected to be bigger, said JPMorgan said in a note.
With all tier-one cities easing the definition of first home mortgage, the previously suppressed demand for property exchange would be released, leading to a short-term recovery of property sales in the cities, it said, adding that the similar relaxation measures in Hangzhou and Jinan had led to a short-term improvement in property sales, followed by a cooling down of the market.
Nevertheless, it believed the measure could stabilise property market sentiment, and would be a necessary step to prevent the market from further deteriorating.
JPM expected state-owned developers to remain the biggest beneficiaries of the easing policy, with China Overseas Land and Investment, China Resources Land and China Jinmao among the major listed firms with more business in Beijing, and Poly Property with more business in Shanghai.