China's first-tier cities revamp home-buying policies

The Chinese capital of Beijing on Monday announced to ease restrictions on homebuying rules to boost the city's property market, including lowering the threshold on non-locals to buy real estate in the downtown area. 

According to a circular jointly issued on Monday night, non-Beijing residents will be allowed to purchase homes within the city's fifth ring road if they have a record of paying social insurance or individual income tax in the city for at least three years – down from five years as was previously required.

The new policies to take effect on Tuesday will also lift the housing purchase restrictions in Tongzhou District, where the Beijing Municipal Administrative Center is located, to allow the district's homebuying rules to comply with the city's unified property market policy.

Under the new rules, homebuyers will face less financial pressure, as the minimum down payment ratio for individual commercial mortgages are reduced from 20 percent to 15 percent for first-home purchases, and from 30 percent to 20 percent for second homes.

For families with more than two children in Beijing, the amount of housing provident fund loan limit will be raised by 400,000 yuan ($57,083), the circular said.

Beijing's announcement followed real estate policy adjustments announced earlier by major Chinese cities Shanghai, Guangzhou and Shenzhen.

The city of Guangzhou in south China's Guangdong Province has lifted restrictions on buying properties, a new step for the first-tier city to further optimize its real estate market.

Starting Monday, qualifications for purchasing a home will no longer be reviewed and there will be no restrictions on the number of homes purchased by families and single individuals with or without local household registration in the city, according to a circular issued by the general office of the municipal government on Sunday night.

In Shanghai, the minimum down payment ratio for individual commercial mortgages will be reduced from 20 percent to 15 percent for first-home purchases, and from 35 percent to 25 percent for second homes, according to a circular issued on Sunday.

Commercial banks will be guided to lower existing mortgage rates to further reduce mortgage interest expenditures for home buyers. Restrictions on home-buying qualifications will be further relaxed in specific locations in the city. The new measures will take effect on Tuesday.

Also on Sunday, the city of Shenzhen in Guangdong Province announced measures such as reducing the down payment ratio and optimizing district-specific home purchase restrictions.

Meanwhile, China's six major national commercial banks announced plans to adjust mortgage rates for existing home loans in line with the central bank's policies to stabilize the property market.

Detailed measures of the adjustment of mortgage rates for existing home loans will be released on October 12, according to statements from the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China.

The statements noted that the adjustment will be implemented by October 31, 2024.

The latest measures follow a meeting of the Political Bureau of the Communist Party of China Central Committee on Thursday, which underlined the need for efforts to reverse the real estate market downturn and stabilize the market.

(Source: Xinhua with edits)