(Bloomberg) -- The city of Beijing became the latest of China’s four so-called tier-one cities to ease rules for homebuyers, following through on the central government’s call to put a floor under the property market decline.
The Chinese capital is easing its rules to allow non-residents to purchase homes in core residential areas within the fifth ring road when they have paid a minimum three years of social insurance or personal income tax, instead of the current threshold of five years, according to a statement from the municipal housing commission.
In an effort to boost market demand, Beijing is also cutting minimum down payment ratios for first homes to 15%, and to 20% for second homes, while it will guide commercial banks to lowering the interest rates of existing mortgage loans in a steady and orderly manner to levels close to those of new loans.
The new measures will become effective from October 1 when the nation starts a week-long national holiday.
That came after three other big cities - Shanghai, Guangzhou and Shenzhen - relaxed their purchase rules. China in late September unveiled its biggest package yet to shore up its beleaguered property market, lowering borrowing costs on as much as $5.3 trillion in mortgages and easing down-payment requirements for second-home purchases to a historical low.
Top leaders also pledged action to make the real estate market “stop declining,” their strongest vow yet to stabilize the sector after new-home prices fell in August at the fastest pace since 2014. The central government directive, including encouraging cities to modify home-buying restrictions, paved the way for China’s biggest cities to roll out easing.
The central bank on Sept. 29 also announced that it will allow refinancing of mortgages. The move, confirming earlier reports by Bloomberg News, underscores China’s urgency to stem a housing-led slowdown in Asia’s largest economy as it faces the prospect of increasing protectionism and a shaky global outlook.
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