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China property: Shanghai, Shenzhen could drop buying curbs after surprise Beijing move
Policy change will have limited impact but could help stabilise Beijing home prices, Morningstar and Fitch analysts say
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Yuke Xiein Beijing
Beijing’s surprise move to lift home-purchase restrictions in outlying areas will help stabilise housing prices in the capital by next year, according to analysts, who added that other major cities like Shanghai and Shenzhen could follow suit.
The municipal government said on Friday that families with Beijing residency, as well as those who paid social insurance and individual income tax in the city for a set period, would be allowed to buy new and second-hand homes outside the Fifth Ring Road, a major highway encircling the suburbs.
The policy change also modified the rules around the housing provident fund – a government-backed savings scheme that subsidises home purchases and rentals. It raised the maximum loan for second homes to 1 million yuan (US$139,247) from 600,000 yuan and reduced the down-payment requirement for such purchases to 30 per cent, ending a higher threshold of 35 per cent that had been in place for inner-city homes.
“While Beijing’s timing for policy relaxation is slightly surprising, we view the move as in line with the central government’s tone of removing buying curbs in non-central areas,” said Jeff Zhang, an equity analyst at Morningstar.
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