How Recent Property Policies Boost Home Purchases in Shanghai and Other Major Cities

Relaxation of Home Purchase Restrictions in Major Cities

This past week, three of China’s major cities have introduced significant housing policies aimed at revitalizing the property market. Starting today, Guangzhou, the capital of southern Guangdong province, will remove all home purchase restrictions. In tandem, Shanghai and Shenzhen have also relaxed requirements for non-local buyers, highlighting an aggressive push to stimulate confidence among homebuyers.

Central Government Stimulus Package

These changes come shortly after the central government launched its most robust stimulus package to support the property sector. Included in these measures are trims to mortgage rates and reduced down payments for second home purchases. Yan Zhancai, a sales consultant at Lianjia, noted, “Significant steps are being taken to encourage homebuying during the coming holiday.”

Impact on Buyer Sentiment

The alterations to property policies are expected to release pent-up demand, evident in the recent surge of inquiries from buyers. Yan Yuejin, vice-president of E-house China Research, remarked, “Guangzhou’s deregulation has set a tone for policy changes across the country.” Buyers in Shanghai recently increased transactions, reflecting optimism about future price jumps in the housing market.

New Developments in Financing and Ownership Rules

From October 1, the down payment ratio for first-time buyers in Shanghai will be lowered to 20% from 30%, while buyers of second homes will see their requirements drop from 35% to 25%. Both cities will also exempt owners of live-in homes from a 5.5% capital-gain tax if they sell after two years, encouraging quick transactions as buyers reclaim confidence in the housing landscape.