Beijing's property sector has seen a growth reboot since the latest moves by authorities to loosen credit and lower down payment requirements for the sector one week earlier, according to local newspaper Beijing Times.
According to the report, six days after the relaxation of housing loan requirements policies were announced on March 30 by the central bank and the housing and banking authorities, new house sales volume in Beijing increased nearly double compared with the same period last year and there has been a peak sales period over the past three-day Qingming Festival.
For homebuyers who are applying for a mortgage for a second home, the minimum down payment is cut to 40 percent from the previous level of 60 to 70 percent. The minimum down payment for first-time homebuyers using public housing funds is cut to 20 percent, compared with the previous level of 30 percent, the central bank said.
On the same day, the Ministry of Finance also announced that homes bought at least two years ago would be exempt from capital gains tax. Previously, only homes bought at least five years ago were exempt from the tax.
Statistics from Beijing Municipal Commission of Housing and Urban-Rural Development shows that from March 31 to April 5, the transition volumes of new house and second-hand property have both seen a significant growth with 2063 apartments, up 19.04 percent month-on-month and 191.8 percent year-on-year and 2496 apartments, up 39.13 percent year-on-year, respectively.
Meanwhile, according to market analysis data released by property agency Lianjia, the average purchase price of second-hand property in Beijing reached 35,353 yuan ($5,698.9) per square meter, a 2 percent increase week-on-week.
"The remarkable growth of contract sales volume in Beijing's real estate sector indicates that last year's slump has been overcome and the overall market is in recovery," said Hu Jinghui, vice-president of 5i5j Real Estate Group.
According to Xinhua News Agency reports, Zhang Dong, head of the property research institute of Zhongnan University of Economics and Law in Central China's Hubei province expressed his concern that the favorable policies will help the housing sector's performance recover "to some extent", while the warning signs seem insufficient proof to conclude that spring has sprung for the property sector.
Zhang said prices might begin picking up in first-tier cities and some cities with relatively low stockpiles, but home-purchase restrictions in some major cities will not allow a sharp rebound in housing demand for investment purposes.
Second-tier cities, including many provincial capitals, will benefit most from the measures, but smaller ones will find it hard to increase flagging housing demand, the expert warned.
"It will take more time and more favorable measures for the property sector to fully recover," Zhang said.
