Beijing is making major policy changes to boost home sales

Cranes can be seen at the construction site of a housing complex in Beijing. Photo: VCG

Beijing’s municipal government announced several major changes to its home purchase policy on Wednesday, including lowering the minimum down payment, in an effort to boost home sales.

From Thursday, the minimum down payment rate for first-time homebuyers will be lowered to 20 percent from the current 30 percent, according to a notice issued by several departments of the Beijing municipal government.

For second home buyers, the down payment rate for homes located within the Fifth Ring Road will be reduced to 35 percent and for homes outside the Fifth Ring Road, the down payment rate will be reduced to 30 percent.

Moreover, according to the notification, for families with two or more children, the purchase of a second home will be covered by a more favorable policy for first-time homebuyers.

Beijing’s move on Wednesday followed similar moves in a growing number of cities across China to ease restrictions on home purchases in an effort to revive the real estate market.

On April 30, a meeting of the Political Bureau of the Central Committee of the Communist Party of China demanded research on policies to reduce housing inventory and improve the quality of newly added housing units, noting that efforts to establish a new viable model should be accelerated. According to Xinhua, the real estate sector is intended to promote high-quality development.

According to officials, some encouraging signs have been seen in China’s real estate industry following various measures taken at both central and local government levels.

Last week, Liu Aihua, spokesman for the National Bureau of Statistics, said that since mid-May, relevant departments and regions have continued to adjust and optimize real estate policies, and there have been some positive changes in the real estate market, while noting that the real estate market is still in adjustment phase.