(ECNS) -- South China’s Guangzhou city announced Wednesday that it has adjusted mortgage lending policies regarding the identification of first-home buyers.
According to the announcement, a household whose family members do not own an urban home should be deemed a first-home buyer when applying for a mortgage loan from a bank, regardless of whether they have previously utilized loans to purchase properties.
"This is the most significant easing in first-tier cities since 2017, fully reflecting the major changes in market supply and demand. The first-tier city has taken a very optimized approach to adjusting housing policies," said Yan Yuejin, research director at E-house China R&D Institute.
"This policy directly benefits the local residents who are looking to upgrade their homes and those who have properties in other cities,” said Zhang Bo, director of the Research Institute at 58 Anjuke Real Estate.
“For the former, after selling their current properties, they can be deemed a first-home buyer when applying for a mortgage loan, leading to a significant decrease in down payments and mortgage interest rates,” Zhang added.
Zhang believes that this policy would initially drive a substantial increase in the volume of second-hand home transactions, which will then have a ripple effect on the new home market."
Zhang Hongwei, founder of Jingjian Consulting, explains that among the four first-tier Chinese cities -- Beijing, Shanghai, Guangzhou, and Shenzhen, Guangzhou has the greatest inventory pressure in real estate, which is why it has taken the lead in adjusting mortgage lending policies.
According to the housing price data released by the National Bureau of Statistics, In July, the prices of new houses in Guangzhou decreased by 0.2 percent compared to the previous month, while the prices of second-hand homes dropped by 1 percent on a monthly basis. This decline in second-hand home prices marked the largest decrease among the four first-tier cities.
Yan Yuejin believes that the other first-tier cities will also introduce relevant policies in early September.