>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<
Several more Chinese cities have relaxed property curbs, mostly lowering down payment requirement for current homeowners, in a move to support persistently sluggish housing market.
The city of Nanjing, capital of East China’s Jiangsu province, will lower the downpayment requirement ratio for households that already own a house but have no record of mortgage loans or have paid off previous mortgage loans to 30% from previous 50%, according to the state-run news wire China News Service, citing Nanjing branches of the Industrial and Commercial Bank of China (ICBC) and the Bank of China (BOC).
For households that already own a house but haven’t paid off previous mortgage loans, the downpayment requirement ratio will be lowered to 60% from previous 80%, according to the report.
The city of Wuxi, also in Jiangsu province, will lower the downpayment requirement ratio for those who own one home but have paid off previous mortgage loans to 30%, and the downpayment ratio for those who own one home but haven’t paid off previous mortgage loans to 50%, reported Chinese news outlet The Paper, citing local banking sources.
The city of Suzhou, another city in Jiansu, have adopted similar measures, lowering the downpayment ratio for second-home buyers who own one home but have paid off previous mortgage loans to 30%, and for those who own one home but haven’t paid off previous mortgage loans to 60%.
In Jinan, capital of East China’s Shandong province, will lower the downpayment requirement ratio for second-home buyers to 40% from 60%, effective from August 15, according to a notice released by the local housing provident fund administration on Friday.
Yan Yuejin, research director of the E-House China R&D Institute, said the policy relaxation in the four cities sent a very clear signal for property policy easing.
The moves suggested that recent property sales data is not so good and local governments are under great pressure and policies are expected to be relaxed further, Yan said.
In the first seven months of the year, more than 210 Chinese cities relaxed property curbs, adjusting property policy by nearly 600 times, according to data compiled by China Index Academy.
Wang Xiaoqiang, chief analyst at Zhege Zhaofang Data Research Center, despite property policy easing this year, market recovery is still weaker than expected, and as of July, new home and second-hand home transactions both significantly lower than the same period last year.
China’s real estate market currently remains in a clear trend correction, lacking market vitality, said Chen Wenjing, director of the index business unit of at China Index Academy, one of the largest independent real estate research firms in the country.
Second-tier cities may further relax restrictions on home purchases, mortgage loans and home resales, while more tier-three and tier-four cities may fully remove property restrictions in an effort to stabilize real estate market expectations, said Chen.
Given the loosening policy, tier-one cities and top tier-two cities may see market stablize first, said Chen.