Beijing cuts down payment rules to boost housing market

China’s capital city of Beijing’s announced a series of measures on Wednesday aimed at reducing the cost of buying homes. The new rules follow similar guidelines issued by China’s central bank last month.

Beijing is lowering the minimum down-payment ratio for first-time homebuyers from 30 per cent to 20 per cent, while reducing it for second-time homebuyers from 40 to 35 per cent.

The city has also implemented a lower floor rate for first-time home mortgages. This new floor rate is set at the Loan Prime Rate (LPR) minus 45 basis points. Previously, the floor rate was set at the LPR plus 10 basis points.

With these changes, all four of China’s largest cities have now implemented relaxed mortgage and other property policies designed to stimulate demand from homebuyers.

Attribution: Reuters