China’s property crisis: Shenzhen cuts down payments for second-home buyers, joining fray of cities trying to revive demand
They are also scrapping a measure that had restricted the scope of buyers who can enjoy lower down payments.
At the same time, Shenzhen’s housing authority scrapped the threshold below which homebuyers qualified for lower down payments, enabling more people to benefit.
The Housing and Construction Bureau changed the definition of “ordinary housing”, or non-luxury homes, that qualify for lower down payments. In the past, only homes valued at less than 7.5 million yuan (US$1.05 million) fell within this category, making them eligible.
“Shenzhen is stepping up measures to boost housing demand, but we believe these are not sufficient to drive a meaningful sales recovery,” Cynthia Chan, an analyst at Daiwa Capital Markets in Hong Kong, wrote in a report. She cited sluggish sentiment among buyers amid an economic downturn and continually falling home prices.
“On a more positive note, we note the government, at both state and local level, accelerated policy support for the sector in recent weeks which, in our view, underscores that policy makers are growing anxious about the sector turmoil evolving into a systematic crisis,” Chan said.
“We believe this will pave the way for stronger measures in the near term.”
