Shenzhen, Guangzhou join China’s property relaxation campaign in bid to lure homebuyers
- Guangzhou cuts minimum down payment ratio to 15 per cent for first-time homebuyers and 25 per cent for second-time buyers
- Shenzhen lowers down payment levels by 10 percentage points to a minimum of 20 per cent for first-time buyers and 30 per cent for second-home purchasers
The cities of Shenzhen and Guangzhou have joined the ranks of major Chinese cities that have lowered mortgage rates to lure homebuyers, close on the heels of the central government’s unveiling of historic stimulus policies this month.
Guangzhou, the capital of China’s southern Guangdong province, reduced the minimum down payment ratio to 15 per cent for first-time homebuyers and 25 per cent for second-time buyers, according to a statement issued by a local branch of the People’s Bank of China on Tuesday. Requirements that limited the floor for mortgage rates were removed.
The city’s authorities also eased restrictions for home purchases, such as rules for social security or individual tax payment records requirements, a separate statement issued late Tuesday showed.
These measures come into effect on Wednesday.
At the same time, China’s tech hub Shenzhen reduced down payment requirements by 10 percentage points to a minimum of 20 per cent for first-time buyers and 30 per cent for second-home purchasers. It also reduced the lower range of mortgage rates based on the tenor of benchmark loan prime rates.
Analysts at Japanese investment bank Nomura said they would monitor home sales in major cities and the status of unfinished projects to understand the effectiveness of these measures.
