(MENAFN- The Peninsula) Bloomberg
Chinese authorities relaxed homebuying curbs in Beijing and Shanghai, extending efforts seen in major cities to stem an unprecedented housing downturn.
The nation's capital cut the down-payment ratio for second homes to 40% or 50%, depending on the locations of the properties, the Beijing Municipal Commission of Housing and Urban-Renewal Development said Thursday on its website. That compares with a previous threshold of 60% or 80%, depending on the size and value of residences.
Beijing also lowered the down-payment ratio for first homes to 30%, from 35% or 40% earlier. And the city allowed more residences to qualify for lower mortgage thresholds by relaxing the definition of so-called non-luxury homes for the first time since 2014.
Shanghai cut the down-payment ratio for first-home buyers to 30% and lowered the ratio to 50% for second-home buyers, China Central Television reported.
It also changed the definition of so-called non-luxury homes, effectively allowing more residences to qualify for lower mortgage thresholds. The financial hub's changes take effect Friday.
The loosening is the latest effort to stabilize the nation's real estate market, which along with related industries accounts for about 20% of the economy.
President Xi Jinping's administration is trying to stop a downward spiral in the property sector from derailing growth and endangering financial stability.
Chinese policy makers have introduced sweeping measures to support the industry in recent weeks, including creating a draft list of struggling real estate developers eligible for bank support. Officials are also weighing a plan that would allow banks to offer them unsecured loans for the first time.
But the task to stabilize the market remains challenging under a broad-based decline, with home sales falling in 18 of the past 22 months. Buyers remain on the sidelines, spooked by construction delays, declining prices and developer defaults.
Fresh stimulus measures rolled out since August have done little to turn around the sector, with a subsequent sales rally in big cities quickly fizzling out. Contractions in sales and property investment deepened last month.
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