Three Chinese megacities on Monday (Sep 30) eased restrictions on buying homes and Beijing’s central bank said it would ask financial institutions to lower mortgage rates, as the country seeks to pull itself out of a housing slump.
The measures are the latest in a raft of pledges out of Beijing since last week aimed at kickstarting the world’s number two economy.
The teetering property sector has long accounted for around a quarter of gross domestic product and experienced dazzling growth for two decades.
But a years-long housing slump has become a major impediment to growth as the country’s leadership eyes a target of around 5 per cent this year – an objective analysts say is optimistic given the many headwinds the economy faces.
Late on Sunday, three of the country’s biggest cities said they would make it easier for people to buy homes in measures that would come into effect on Sep 30.
The southern megacity of Guangzhou – home to more than 14 million people – said potential homebuyers would no longer have their “qualification for purchasing homes” reviewed, state news agency Xinhua said.
There will also be “no restrictions” on how many homes a person can buy, it added.
The nearby city of Shenzhen also eased some purchasing restrictions, with buyers no longer subject to “review of their home purchase qualifications”, local media citing authorities said.
And in the eastern economic powerhouse of Shanghai – the country’s richest city – authorities said they would reduce the tax burden on some homebuyers and lower down payments on homes.
The swath of announcements came as China’s central bank said Sunday it would ask financial institutions to cut interest rates on existing home loans in a bid to “lower financial burdens on property owners”, Xinhua said.
Yan Yuejin, deputy director of E-house China R&D Institute in Shanghai, told AFP the moves were driven by “pressure” in the property market.
“Fewer people are buying property these days,” he said.
Getting the property market moving again, Yan said, was key to boosting lagging domestic consumption – another major drag on growth.
China’s leadership last week unveiled a raft of measures to boost the economy in one of its biggest drives in years to kickstart growth.
