Shanghai is lowering second-home down payments. Will it boost the property market?
The megacity joins Beijing in further easing financial barriers for homebuyers, as authorities push to spark a durable recovery
Shanghai has announced further cuts to minimum down‑payment requirements for homebuyers, joining Beijing to become the latest top-tier Chinese city to ease curbs in the hopes of engineering a broad recovery for the country’s struggling property market.
The minimum down payment for buying a second home was reduced from 20 to 15 per cent, bringing it in line with the threshold for first-time homebuyers, the local government announced on Thursday.
Encouraging a recovery in new-home sales is part of the central government’s efforts to stabilise the property sector. Shanghai authorities are currently required to set minimum mortgage down payments at 15 per cent or above, according to the People’s Bank of China, the country’s central bank.
Another change will allow potential homebuyers in Shanghai to withdraw cash from their housing provident fund accounts to cover down payment costs for all new flats, a change analysts said could ease financial pressure.
The city will also offer cash incentives to encourage purchases of newly built residential units beyond the Outer Ring Road in suburban districts. Qualified homebuyers are eligible for subsidies capped at 80,000 yuan (US$11,897) per property.
The move comes only two weeks after Beijing announced seven measures to support its property market, including lowering thresholds for non-residents to buy homes.