It would also ease restrictions on home purchases by non-local buyers, reducing the requirement for ongoing Social Security or income tax payments in the city to three years in central areas, from the previous threshold of five years.
Measures trigger stock markets in China
New measures in China to relaunch the real estate sector, easing restrictions on home purchases in large cities, sent the stock markets of the world’s second largest economy soaring on Monday.
The real estate and construction sector has long accounted for more than a quarter of China’s gross domestic product (GDP).
But since 2020, Beijing has tightened access to credit for real estate developers, which brought giants in the sector such as Evergrande or Country Garden to the brink of bankruptcy.
Unfinished works, the economic slowdown and a drop in prices, which devalue properties, have since dissuaded the Chinese from investing in brick.
To stimulate the sector, several Chinese megacities announced on Sunday an easing of local restrictions on home buying.
In the southern city of Canton, with nearly 19 million inhabitants, an individual could not legally buy more than two homes to avoid real estate speculation during the boom years.
As of this Monday, this restriction no longer exists and the real estate market is no longer reserved only for the inhabitants of this city.
Neighboring Shenzhen, with about 18 million inhabitants, also adopted a similar provision, but only in its peripheral areas.
Likewise, economic powerhouse Shanghai, where nearly 25 million people live, lowered the down payment required to purchase a first home.
The authorities also announced on Sunday a reduction in mortgage rates for the purchase of primary and secondary residences.
The package of measures encouraged Asian investors, with strong increases in Chinese stock markets.
The Shanghai stock market shot up 8.06%, and the Shenzhen stock market, China’s second-largest stock market, rose 11%. For its part, the Hong Kong market, which closed later, rose 2.43%.
Such rebounds continued the expansions of last week, following the stimulus measures adopted by the Chinese authorities to reverse the slowdown of the world’s second largest economy.
With information from Reuters and AFP
