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More optimized housing policies in China address diverse demands, raise market expectations

Source: Xinhua Updated: 2024-05-29

BEIJING -- A slew of measures recently rolled out across China have begun boosting the property market, with different cities adopting specific measures to address the diverse demands of home buyers.

In the latest move, authorities in Shanghai on Monday announced nine specific measures, including easing home-purchase restrictions for non-Shanghai residents and divorced couples, allowing families with two or more children to purchase an additional home, and lowering the minimum down payment ratio for individual commercial housing mortgages.

The property market responded immediately to these measures, with a surging number of inquiries and orders concluded later on the same day.

At the sales office of a real estate project in Shanghai's Jiading District, Zhang Rui paid a deposit for his second home merely half an hour after the announcement of the new housing measures.

"Since the minimum down payment ratio for second homes has been lowered from 50 percent to 35 percent, my limited savings are no longer a concern," said Zhang.

Niu Jianghai, sales and marketing manager of the project, said inquiry calls surged by three times on Monday evening and the sales office extended its opening hours to serve the visiting clients.

These targeted new measures will better meet basic housing demand and diverse desires for improved housing, which will help raise market expectations and boost market confidence, said Jiang Weiru, secretary-general of the Shanghai Real Estate Trade Association.

Apart from Shanghai, cities including Beijing, Tianjin, Hangzhou, Xi'an and Chengdu have also adjusted their real estate policies recently, announcing measures such as eased purchase restrictions and the trade-ins of commercial housing.

Incomplete statistics show that more than 70 Chinese cities have rolled out trade-in promotions, encouraging residents to trade their old homes in for new ones.

In the city of Taicang in Jiangsu Province, east China, Chen Libin traded in her 129-square-meter old home for a new one measuring 143 square meters in April, borrowing 790,000 yuan (about 111,000 U.S. dollars) to cover the price difference.

"The trade-in policy has helped save me from paying the agent fee and I also got a deed tax exemption," said Chen, adding that the latest policy saved her nearly 100,000 yuan.

As of late April, 235 new commercial apartments had been transacted through trade-ins in Taicang, with the sales volume of these apartments reaching 802 million yuan.

The traded old apartments will be used as affordable housing or as accommodation for talent relocating to the city, according to the city's housing and urban-rural development bureau.

On May 17, China announced a raft of measures to boost the property market, cutting minimum down payment ratios, setting up a re-lending facility for affordable housing and pledging to deliver unfinished homes.

These national and local measures echoed a Communist Party of China (CPC) Central Committee Political Bureau meeting on April 30, which demanded research on policies to reduce housing inventory and improve the quality of newly added housing.

Yan Yuejin, research director at E-house China R&D Institute, said that following this round of policy optimization and adjustment, China's real estate market is expected to usher in a wave of destocking commercial housing projects, which will help build up market confidence and promote the recovery of the property market.