New housing polices stoke China's real estate market

2024-05-23 Editor : Mo Honge ECNS App Download

(ECNS) -- China's real estate market has begun to warm up after new policies were announced Friday.

The People's Bank of China removed commercial mortgage rate minimums for first and second homes nationwide, and lowered minimum down payment ratios for first and second homes, respectively, to 15 percent and 25 percent.

It also announced the establishment of a 300-billion-yuan ($41.51 billion) relending facility for affordable housing to encourage and guide financial institutions to support local State-owned enterprises in acquiring unsold completed commercial housing at appropriate prices.

The new policies will significantly reduce the burden on homebuyers, said Li Yujia, chief researcher at the Housing Policy Research Center of Guangdong Urban-Rural Planning and Design Research Institute. "Monthly payments will not significantly affect buying patterns," Li said.

Yan Yuejin, research director at the Yiju Research Institute, said the new policies would pose a substantial impact on homebuyers who want to enter the market, and help invigorate recovery of the real estate market. 

Data from Centaline Property indicates that after the new housing policies were announced on May 17, the daily average for second-hand housing transactions in Beijing surpassed 1,000 units (over 900 on Saturday and over 1,100 on Sunday). Additionally, there has been a noticeable uptick in the volume of transactions for some new residential buildings. 

Homeowner Cheng Cheng (a pseudonym) experienced the heat of the market this weekend. "I have entrusted my house to a real estate agent for several months. Once every two weeks someone would come to see it before the new polices. This weekend, ten groups came in just two days," she said.

This caused a subtle change in Cheng's attitude. "The price I listed did not change, but my psychological price has gone up. I won't engage in further discussions with potential buyers who don't meet my psychological price," she said. 

Previously, some buyers would bargain for hundreds of thousands of yuan off. "Now, if someone bargains like that again, I won't even bother to respond," she said.

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