Policy change aims to help capital's residents upgrade
Beijing has announced new mortgage rules that take effect on Monday for residents using their housing provident fund accounts, including lower down payments and easier conditions for second-home purchases, a move that experts said will boost prices and transactions in the capital.
Homebuyers in Beijing will only need a minimum down payment of 20 percent, regardless of the size of the apartment, as long as they do not own any other homes at present, the Beijing Provident Fund Management Center (BPFMC) said in an online statement on Friday.
The policy widens the definition of "first home." Under the previous policy, homebuyers who had already used their housing provident fund accounts to buy any apartment were no longer considered first-time buyers.
Any further purchases of any size home required a 70 percent down payment.
Now, such apartment purchases can be classified as upgrading, rather than second-home purchases.
Beijing's previous policy also said that for first homes larger than 90 square meters, the minimum down payment was at least 30 percent. Under the new policy, such buyers will only need a 20 percent down payment.
As for second-home buyers, the minimum down payment for any size of apartment has been also cut to 30 percent effective Monday, compared with 70 percent previously.
The policy changes are intended to help residents upgrade their housing, the -BPFMC said.
The move follows a joint notice on March 30 from the People's Bank of China, or the central bank, the Ministry of Housing and Urban-Rural Development and the China Banking Regulatory Commission, which eased mortgage conditions for second-home buyers and waived transaction taxes on apartment sales.
Property prices in some major markets have recovered since the announcement came out, led by first-tier cities, where prices increased in April, Zhang Hongwei, research director at Shanghai-based property consultancy ToSpur, wrote in a research note sent to the Global Times on Sunday.
The National Bureau of Statistics (NBS) said on May 15 that housing prices rose month-on-month in April in 18 out of 70 major cities. Prices in all four first-tier cities - Beijing, Shanghai, Guangzhou and Shenzhen - increased during the period, the NBS said. In Beijing, for example, the gain was 0.7 percent for new units.
Considering the recovery and encouraging mortgage -policies, it is certain that -transaction volumes will jump in first-tier cities in the next several months, according to Zhang.
Compared with third- or fourth-tier cities, first-tier cities have stable housing demand and lower inventories, so policy changes can easily get a positive market response, Liu Yuan, a research director at Centaline Property Agency, told the Global Times on Sunday.
And with local governments also making policy changes, transaction volumes and prices are set to rise, Liu said.
