The nationwide minimum down payment will be uniformly set at 20% for first-time buyers and 30% for second-time purchasers.
China moved to allow its largest cities to cut down payments for homebuyers and encouraged lenders to lower rates on existing mortgages in its latest attempt to halt a slide in the country’s residential property market.
The moves will likely boost property sales, alleviate liquidity pressure for buyers and improve market sentiment, Citigroup Inc. economists led by Xiangrong Yu wrote in a research note. “The favorable policy shift and the nearly confirmed cyclical bottom of the economy could be supportive for China assets.”
What Bloomberg Economics Says… ADVERTISEMENT CONTINUE READING BELOW “Bloomberg Economics estimates that the measures can release household purchasing power of around 0.24% of GDP — equivalent to a 15-basis-point cut in the policy rate.” Local governments will set their own down-payment thresholds and interest-rate floors according to regional market conditions, the national regulators said Thursday.
“The entire package is a step in the right direction — these are stabilizing measures, and will help confidence from sliding further,” said Kelvin Lam, a China economist at Pantheon Macroeconomics.
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