Xinhua
29 May 2022, 07:00 GMT+10
BEIJING, May 29 (Xinhua) -- China has actively rolled out targeted measures such as relaxing restrictions on purchases or sales, adjusting housing provident fund policies, and lowering mortgage interest rates to better cater to the residential buying market, and boost the development of the property market.
Beset by factors such as COVID-19, an expected fall in personal income and debt default risks of certain property developers, China's real estate market has seen contractions this year.
In the first four months of the year, commercial housing sales dived 20.9 percent in terms of floor area and 29.5 percent in terms of value.
While reiterating the principle that "housing is for living in, not for speculation," a key meeting of China's top decision-makers held last month called for efforts to improve real estate policies, an important underpinning for the economy.
China's property industry, with a size of 10 trillion yuan (about 1.48 trillion U.S. dollars), involves scores of subsectors across the supply chain. Official data showed that the industry's value-added output accounted for 6.8 percent of the country's gross domestic product in 2021.
At the State Council's executive meeting on Monday, the country once again stressed that city-specific policies will be adopted to meet people's basic housing needs and their wish to improve housing conditions.
As of May 25, 20 Chinese cities had relaxed restrictions on house sales, data from the China Index Academy showed.
"The relaxation of sales restrictions can increase housing supply in the short term, improve the liquidity in the second-hand housing market, and further release demand for better housing conditions," said Guan Rongxue, an analyst with the Zhuge House Hunter, an online property platform.
Some cities started to allow families with more than one child to buy an additional home under the current restrictions or be exempted from the restrictions, as part of efforts to ease the housing shortage for them and inject vitality into the property market.
For cities, especially third- and fourth-tier ones, with no house purchasing restrictions, adjusting housing provident fund policies is an effective way to shore up demand.
At least 70 Chinese cities have released nearly 100 housing provident fund adjustment policies so far this year, focusing on enhancing the quota and lowering the down payment proportion of provident fund loans, according to the China Index Academy.
Chen Wenjing, director of research at the academy, believes that more cities will optimize relevant policies to strengthen the guarantee function of the housing provident fund.
The country's financial authorities have sent clear signals recently to support the growth of real estate credit.
A circular jointly released by the People's Bank of China and China's Banking and Insurance Regulatory Commission on May 15 allowed commercial banks to reduce the lower limit of interest rates on home loans by 20 basis points for first-home buyers, based on the tenor of benchmark loan prime rate (LPR).
On May 20, China announced it would cut the over-five-year LPR, on which many lenders base their mortgage rates, by 15 basis points to 4.45 percent, which will also help the real estate market sustain stable development and stimulate overall demand.
Noting that a healthy property market plays a positive role in stabilizing economic growth, Xu Xiaole, a senior analyst with China's real estate brokerage platform Beike, said measures should be taken to boost the virtuous cycle of the sector.
Real estate policies, however, must not be leveraged as a short-term economic stimulus, he said.
The country should strive to maintain the continuity and stability of its regulatory measures, with policy precision and coordination strengthened, in a bid to anchor housing prices and market expectations, said Feng Jun, head of the China Real Estate Association.
Get a daily dose of Taiwan Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Taiwan Sun.
More InformationFRANKLIN, Tennessee: Hundreds of thousands of Nissan and Infiniti vehicles are being recalled across the United States due to a potential...
REDMOND, Washington: Microsoft is the latest tech giant to announce significant job cuts, as the financial strain of building next-generation...
LONDON UK - U.S. stock markets were closed on Friday for Independence Day. Global Forex Markets Wrap Up Friday with Greeback Comeback...
SANTA CLARA, California: Nvidia came within a whisker of making financial history on July 3, briefly surpassing Apple's all-time market...
SACRAMENTO, California: California's multibillion-dollar farms are facing a growing crisis—not from drought or pests, but from a sudden...
WASHINGTON, D.C.: President Donald Trump says the United States could soon reach a trade deal with India. He believes this deal would...
MADRID, Spain: Liverpool footballer Diogo Jota and his younger brother, André Silva, have died in a car accident in Spain. Spanish...
LONDON, U.K.: An unrelenting heatwave sweeping across Europe has pushed early summer temperatures to historic highs, triggering deadly...
President Donald Trump's plans to build a space-based Golden Dome missile defense shield have drawn immediate criticism from China,...
NEW YORK CITY, New York: Paramount has agreed to pay US$16 million to settle a lawsuit brought by U.S. President Donald Trump over...
LONDON, U.K.: British Prime Minister Keir Starmer won a vote in Parliament this week to move ahead with changes to the country's welfare...
WASHINGTON, D.C.: President Donald Trump will meet Israeli Prime Minister Benjamin Netanyahu at the White House on Monday. President...