China’s financial authorities, the People’s Bank of China and the National Financial Regulatory Administration, rolled out a wave of policies on Sunday to stabilize the real estate market.
The mortgage rates for first homes, second homes and more are required to be reduced no lower than 30 basis points below the loan prime rate by October 31, 2024, to ease financial burdens on property owners.
<img src='https://news.cgtn.com/news/2024-09-30/China-unveils-raft-of-measures-to-stabilize-property-market-1xjTpFGfkpq/img/fb98f848724a46d8b78201a6e385dacd/fb98f848724a46d8b78201a6e385dacd.png' alt='A view of the headquarters of China's central bank, People's Bank of China, Beijing, September 10, 2024. /CFP'
In principle, 18 national commercial banks need to release their plans for adjustments before October 12.
The minimum down payment ratio for individuals’ commercial housing mortgages will be lowered to no less than 15 percent for both first-home and second-home purchases.
The pricing mechanism for interest rates of individuals’ commercial housing mortgages will be refined so that the rates can be adjusted dynamically based on agreements between borrowers and banks.
The central bank will increase funding for financial institutions if they issue loans to support local state-owned enterprises to acquire completed yet unsold commercial housing at reasonable prices for use as affordable housing.
<img src='https://news.cgtn.com/news/2024-09-30/China-unveils-raft-of-measures-to-stabilize-property-market-1xjTpFGfkpq/img/aa59430b1eb048039c7ab1c571321901/aa59430b1eb048039c7ab1c571321901.png' alt='A group of newly built residential properties. /CFP'
In addition, some financial policies for the property market will be extended.
This array of stimulus measures came after a recent meeting of the Political Bureau of the Communist Party of China Central Committee underlined efforts to reverse the downturn of the real estate market and stabilize it.
Many of the recent stimulus measures have exceeded expectations, analysts at Morgan Stanley wrote in a research note provided to CGTN on Sunday.
The analysts noted the Chinese government’s “forceful” monetary easing and unprecedented measures aimed at stabilizing and supporting the stock market and halting the property market’s decline, adding that they expect more in the coming months.
They forecast a “modest” quarterly growth for the economy going towards the end of the year, followed by an acceleration to 5.3 percent quarterly growth in the first quarter of 2025.
(With input from Xinhua)
