More than 50 Chinese cities have introduced property policy easing to stabilize the housing market since the end of September, including the four tier-one cities and other major cities like Xiamen, Hangzhou, and Chengdu, according to real estate research firm CRIC.
The policy measures were mainly focus on easing restrictions on home purchases, mortgage loans, home prices and home resales, as well as increasing the cap on loans from housing provident funds, offering home purchase subsidies and supporting home trade-in, it said.
On September 24, the Chinese government introduced a series of policies to support the real estate sector, including reducing existing mortgage rates and standardizing the minimum down payment ratio for home loans. On September 26, the Politburo meeting first stated the need to “promote the stabilization of the real estate market,” setting a new tone for the industry. Subsequently, the four tier-one cities announced property policy easing, boosting market expectations and helping to stabilize the market.
On October 12, the Ministry of Finance announced further measures to stabilize the housing market, including allowing local government special bonds to be used for land reserves and acquiring unsold homes, and said that other policy tools are under consideration.
Many cities have seen pick-ups in housing market activity during the National Day holiday. According to CRIC, new home subscriptions, measured in floor area, in 23 major cities surged by 77% from the previous month and jumped by 65% from a year ago. In the first-tier cities, the figure surged by 102% year-on-year, and that in second- and third-tier cities jumped 55%.
Based by the situation in the first two weeks of October, the housing market in many cities saw a strong start to the traditionally peak season “Golden October”, and this round of policy easing is leading to a recovery in the near term, CRIC said.
If the policies are fully implemented, the macroeconomy recovers and the stock market stabilizes, it’s highly likely that the real estate market will stop its decline and stabilize in the fourth quarter, it added.