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Shanghai announces major policy measures to boost housing market

Global Times

By Global Times Published: May 28, 2024 05:01 AM

Shanghai announced on Monday that it will take a series of measures to optimize the local real estate market and promote stable and sound development, including relaxing certain restrictions on home purchases and reducing financial requirements. Experts said it will offer a significant boost for the housing market.

In a notice, four departments of the Shanghai Municipal government said that they will further optimize home purchase policies, support the demands of families with multiple children, and adjust mortgage policies. In total, the notice contained nine new policy measures, which will take effect on Tuesday.

Notably, the down payment ratio for first-time home buyers has been cut to 20 percent from the previous 30 percent, and the ratio for those who buy second homes has been cut to 35 percent from 50 percent, according to the notice.

Also, the minimum five-year mortgage rate for first-time home purchases has been lowered to 3.5 percent, while the rate for second home purchases has been reduced to 3.9 percent from 4.5 percent.

Moreover, the city will provide direct financial support for families facing difficult housing situations. Qualifying families will be able to apply for subsidies of up to 30,000 yuan ($4142.5) depending on the floor space of the apartments.

Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, said that Shanghai's measures cover a wide range of areas and are "innovative," pointing to the subsidies for families seeking to improve their housing situation.

Shanghai's move came after a number of other Chinese cities issued similar policy measures to boost the real estate market. Many of the cities moved to relax restrictions on home purchases, cut down payment ratios and lower mortgage rates.

At the national level, several central government departments announced a massive package of policies to revive the real estate industry on May 17. The policy measures include lower down payment ratios and lower mortgage rates.

The policy measures came after a meeting of the Political Bureau of the 20th Communist Party of China Central Committee on April 30 demanded research into policies to reduce housing inventory and improve the quality of newly added housing, noting that efforts should be made to establish a new model for the real estate sector to promote its high-quality development.