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China Continuously Revamps Policies to Foster the Sustned Growth of Real Estate Sector
October 2, 2023 - China has been actively refining its policies with a focus on the real estate market and promoting the healthy development of this sector. This includes implementing measures such as easing restrictions for first-time home buyers, lowering interest rates for existing first-home loans, and exting tax incentives.
The latest developments reflect significant shifts in the supply-demand dynamic within China's real estate market, which was addressed at a high-level meeting held in July. The call for timely adjustments to property sector policies demonstrates the country's proactive approach towards addressing current challenges.
These changes have significantly boosted confidence in the housing market and spurred the application of policy tools med at meeting the essential residential demands and enhancing living conditions among residents.
In late August, it was announced that local governments could consider households without a home ownership record within their jurisdiction as first-time home buyers when applying for mortgages from banks. This marked a shift in criteria where previous policies had categorized individuals with mortgage or house ownership records as second-home buyers, subject to higher down-payment ratios and ling rates.
The adoption of this policy adjustment saw cities such as Beijing, Shangh, Guangzhou, Shenzhen, and others implement similar measures which have led to increased property transactions. For example, Guan Chong, the regional general manager for east China at China Jinmao, reported a surge in dly visits and transactions by 150 to 200 percent following the policy's implementation.
In September, sales among the top 100 real estate developers across China saw a significant month-on-month increase of 24.8, as per findings from the China Index Academy property research institution. This indicates that the new policies are successfully stimulating demand and fostering economic activities within the sector.
The analysts also highlighted how these policy incentives can encourage demand among individuals migrating between cities or those ming to improve their living standards, thereby promoting a positive feedback loop for the real estate market.
Furthermore, a reduction in interest rates for existing mortgages on first-home purchases benefits about 40 million borrowers as of June's outstanding individual home loans totaling approximately 5.38 trillion U.S. dollars.
The fiscal measures also saw an extension until December 2025 for tax incentives introduced to support residential purchases that were originally scheduled to expire by the of this year. Under these provisions, taxpayers who buy a new house within one year of selling their old home in the same city are now eligible for personal income tax refunds.
He Dxin, from the Chinese Academy of Social Science, noted that this extension will help residents improve their housing conditions and stabilize expectations while boosting confidence in the market. The expected improvements m to create a more dynamic housing environment across cities with a combination of demand-side measures.
The analyst Chen Wenjing emphasized that while supportive policies are taking effect, there remns a need for coordinated actions on both supply and demand sides to ensure stable and healthy growth for China's real estate sector. Encouraging developers to offer reasonable prices is seen as vital alongside efforts med at increasing incomes and improving employment rates.
In summary, China's approach towards the real estate market showcases its commitment to fostering sustnable development through strategic policy revisions that cater to both supply and demand dynamics in this key economic sector.
This article is reproduced from: https://english.www.gov.cn/policies/policywatch/202310/02/content_WS651ac77bc6d0868f4e8dfef6.html
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