Major Chinese cities vow to optimize real estate policies to boost recovery

Major Chinese cities including Beijing, Shenzhen and Guangzhou have vowed to better meet the public's rising housing needs, after China's housing minister called for more efforts to strengthen the property market with measures such as lowering payment requirements and mortgage rates for first-time homebuyers.

The latest moves came from Shenzhen and Guangzhou in South China's Guangdong Province on Sunday, as local housing officials vowed to optimize policies and adapt policy tools based on the cities' actual situations, in a bid to better meet local housing demand and promote the sector’s healthy development.

Beijing and Hefei in East China’s Anhui Province made similar statements over the weekend.

At a recent symposium with property developers, Ni Hong, minister of housing and urban-rural development, urged continued efforts to consolidate the recovery trend of the property market, according to the ministry on Friday.

Ni stressed the significance of meeting residents' essential housing demand and their need for better living conditions. He also called for fully implementing favorable measures, including lower down payment requirements and mortgage rates for first-time homebuyers, tax breaks for upgrading and treating buyers who had paid off prior mortgages to be treated as first-time purchasers. He also called for efforts to ensure the delivery of presold homes.

The statements released by major Chinese cities signal a policy optimization, while the implementation of detailed measures may be accelerated, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

Yan said that the focus would be on lowering the thresholds for property purchasing requirements, loan rates and tax requirements — especially for first-tier cities. Ni’s remarks will further boost the market as clear guidance for local authorities, he said.

The call to treat homebuyers who had paid off prior mortgages to be treated as first-time purchasers has drawn attention. Yan said that the policy will significantly reduce down payments and interest costs for more homebuyers.

The Political Bureau of the Communist Party of China Central Committee on July 24 held a meeting to analyze the current economic situation and make arrangements for economic work in the second half of the year.

The meeting noted that real estate policies should be adjusted and optimized in a timely manner, adding that the policy toolkit should be well utilized with city-specific measures to better meet residents' essential housing demand and their needs for better housing, and advance the stable and sound development of the real estate market, according to the Xinhua News Agency.

Property investment fell 7.9 percent year-on-year to 5.86 trillion yuan ($819.7 billion) in the first half of 2023, data from the National Bureau of Statistics (NBS) showed earlier in July.

Fu Linghui, an NBS spokesperson, noted that the real estate sector showed a stabilizing trend in the first half of 2023 with major indexes including housing sales and property investment posting improvement compared with 2022.

Fu said that the property market will further stabilize with the economic recovery and targeted policies promoting the sector’s healthy development.