Zhengzhou, China Implements Property Support Measures to Boost Market

Article ## Zhengzhou City in China Launches Property Support Measures

Zhengzhou, the capital city of central Henan province, announced a series of measures med at revitalizing its property market. These include reductions on mortgage rates and down payment ratios as well as cuts to housing transaction taxes. Additionally, families with more than one child are eligible for home-buying subsidies under these new rules.

The Zhengzhou Housing Regulatory Authority issued late last Thursday evening. The impact of this significant move remns to be seen in terms of immediate market reactions; however, it signifies a positive step, as analysts predict that other major cities may follow with similar measures.

Nomura commented on the matter, expressing confidence that the easing of property restrictions in Zhengzhou will likely receive a favorable response from markets. The brokerage also expressed some concerns about the implications this move could have on demand dynamics: We are concerned that the lifting of local property constrnts by large cities might draw away demand from smaller-tier cities, which account for 70 of national new home sales volume and drive actual construction activity.

Furthermore, there is a concern about merely easing restrictions on existing home sales without a corresponding lifting of purchase regulations. This could potentially increase supply while depressing prices.

The city's move follows a recent directive by China’s central bank governor who pledged to ensure more financial resources flow towards private enterprises including the property sector.

To summarize, Zhengzhou's support measures for its property market have been unveiled amidst signs that demand for the once robust real estate industry is weakening in recent weeks. Property sales between May and June showed the largest monthly decrease this year based on floor area.

The central party leadership highlighted at a top decision-making body of the ruling Communist Party that it is necessary to adapt to significant changes in market supply and demand by optimizing property policies in a timely manner.

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