BEIJING (Agencies): China has unveiled a comprehensive policy package aimed at revitalizing the real estate market. These sweeping measures, described as “unprecedented,” address various aspects of the housing sector. The move is expected to reverse the recent property adjustment downturn and fuel a robust rebound.
Key highlights of the policy package include:
- Down Payment Ratios:
- The minimum down payment ratios for individuals’ commercial housing mortgages have been significantly lowered:
- First-home purchases: 15% (previously 20%)
- Second-home purchases: 25% (previously higher)
This represents the lowest down payment ratio in history and underscores China’s commitment to property destocking and supporting housing consumption.
- Interest Rate Reductions:
- The interest rate for housing provident fund loans has been lowered by 0.25 percentage points for both first-time and second-time homebuyers.
- The housing provident fund is a long-term savings plan specifically for house-related expenses.
- Abolition of Interest Rate Floor:
- The floor level of interest rates for individuals’ commercial housing loans (both first and second homes) has been abolished nationwide.
- Local central bank branches can determine lower limits for commercial mortgage rates based on local conditions, while financial institutions set floor lending rates according to their business conditions and borrower risks.
These measures demonstrate China’s commitment to balancing supply and demand in the real estate sector and promoting healthy growth. The country’s GDP is expected to reach around 5% this year, with potential for further growth if policies yield greater effects.