China has announced several new measures to lower home prices and boost rational demand to further stabilize the domestic property market. Taxpayers who purchased residential properties within a year of selling previously owned residential assets will receive tax refunds for the latter, the Ministry of Finance and the State Taxation Administration announced. The new policy will be valid from October 1 until the end of 2023, according to the official notice.
The People’s Bank of China (PBOC) said that the interest rate for housing provident loans will be lowered by 0.15 percentage point for first-time home buyers starting from October 1 whilst that of second homes stays unchanged. The country’s financial authorities also said that China will loosen the lower limit for mortgage rates for first-time homebuyers in some cities. By the end of 2022, urban governments will decide if they will retain, reduce or remove lower limits for mortgage rates for first-time home loans in phases. Once new mortgage rate policies are adopted, home loan interest rates can be reduced below the previous lower limit of 4.1%.
All these measures are intended to boost market demand to stabilize the real estate market and the overall economy by creating a virtuous cycle, said Li Yujia, Chief Researcher at the Guangdong Planning Institute’s Residential Policy Research Center. A total of 23 cities are eligible for loan interest rate relaxation, according to the National Bureau of Statistics (NBS). “The introduction of the new policy will help hesitant buyers make their decisions in a more timely manner so as to stimulate the market in the fourth quarter,” said Chen Wenjing, Director of Research at the China Index Academy, as reported by the China Daily.
