Shenzhen in Guangdong province relaxed curbs on local home purchases by lowering down payment requirements for second homes to as low as 40% effective November 23. Real estate industry experts said Shenzhen’s move has raised hopes that other first-tier cities might consider similar easing. The Shenzhen sub-branch of the People’s Bank of China (PBOC) issued a notice stating that the technology hub will lower the down payment ratio for second homes to 40%. The ratio used to be 70% for ordinary housing and 80% for non-ordinary housing.
The new measures make Shenzhen the second first-tier city to adjust the second-home down payment ratio after Guangzhou, capital of Guangdong province. Shenzhen’s Housing and Construction Bureau also widened the criteria for ordinary housing, or non-luxury homes, to be eligible for smaller down payments. The requirement that the transaction value must be lower than CNY7.5 million has been removed. “More families willing to buy homes or upgrade to better homes can benefit from the favorable measures, and the reduced cost of home purchases will help boost market confidence,” said Guan Rongxue, Senior Analyst with the Zhuge Real Estate Data Research Center.
Housing markets now anticipate more policy relaxations in first-tier cities, especially Beijing and Shanghai, said Guan. Yan Yuejin, Director of the Shanghai-based E-house China Research and Development Institution, said Shenzhen’s policy adjustment will support reasonable housing consumption for families looking for improved homes. According to Li Yujia, Chief Researcher at the Guangdong Planning Institute’s Residential Policy Research Center, among the nation’s four first-tier cities, Shenzhen has made the greatest number of adjustments to its housing policy. “Since May 2021, its pre-owned home prices have been declining, and transaction volumes of both new and existing homes are at historical lows,” Li said. Policy easing and adjustments are in line with the nation’s vision for new property development, and there is still spacious room for further policy adjustments, he said. Real estate stocks rose on November 23, with Country Garden shares surging 23.53% and those of Longfor Group up over 13%, the China Daily reports.
