China’s housing ministry has announced plans to make property buying easier for people. This comes after Beijing indicated a shift away from its crackdown on real estate speculation. The planned measures include easing purchase restrictions for those wanting to buy a second house and reducing down payment ratios for first-time homebuyers. China has previously made it difficult for people to buy a second house to reduce speculation in the property market. Mortgage rates for a second purchase can be higher, and the down payment ratio can be as high as 70% or 80% in large cities.
The housing ministry mentioned comments from its minister Ni Hong during a meeting with construction and real estate companies. While the meeting did not discuss policies for individual cities, experts expect that local governments will be encouraged to announce real estate policy changes specific to their situations. The inclusion of construction companies at the meeting emphasizes their role in promoting investment and stabilizing growth.
China has not yet announced formal measures for supporting real estate, but top-level leaders have signaled a greater focus on housing demand rather than supply. The State Taxation Administration has also announced guidelines for waiving or reducing housing-related taxes, although the implementation for home buyers is still unclear.
The phrase “houses are for living in, not speculation,” which has been a mantra for Beijing’s stance on real estate, was removed from the readout of a recent Politburo meeting. This suggests that the housing ministry is responding quickly and becoming more lenient on property policies. Markets are anticipating specific policy implementations in cities like Shanghai or Guangzhou.
Chinese property stocks, such as Longfor, Country Garden, and Greentown China, traded higher following the announcement, bouncing back after a plunge earlier in the week due to debt concerns. Experts advise investors to focus on beta names within the property sector, including U.S.-listed Ke Holdings and Hong Kong-listed Longfor and China Overseas Land and Investment. However, they caution against weaker privately-owned developers.
You must log in to post a comment.