Cities increase policy support for housing market

During the May Day holidays, more than 10 Chinese cities, including Wuxi, Lianyungang and Xuzhou in East China’s Jiangsu Province as well as Yueyang in Central China’s Hubei, rolled out various policies, including lower down payment ratios for home purchases and relaxation of sales restrictions, to further stabilize the real estate market.

The moves followed a top leadership meeting on April 29, which sent more positive signals for stabilizing the real estate industry and supporting localities to improve their real estate policies to meet housing demand.

Industry insiders said that given the tone of the meeting, localities will further relax restrictions on home purchases. Local governments will also actively follow up on policies to support enterprises’ reasonable financing needs and optimize the supervision of pre- sale funds.

Xuzhou announced a series of policies, including cutting interest rates on mortgages and encouraging financial institutions to reduce the down payment ratio for first- time buyers.

The local government is striving to help developers by increasing support for project loans and M& A loans, and actively extending and renewing loans to troubled enterprises to relieve their capital pressure.

“The moves reflected localities’ urgency and initiative to boost the property market, especially during the golden week of property sales,” said Yan Yuejin, research director at Shanghai- based Ehouse China R& D Institute.

However, data from the China Index Academy showed that during the fiveday holidays, the area for new commercial residential transactions in key cities fell 52.3 percent year- on- year, reflecting shrinking demand.

Yan noted that all these central and local government moves will contribute to boosting the market in May, suggesting that the authorities accelerate the release of supporting measures and lift restrictive policies.