The municipal authorities in Shanghai and Shenzhen announced on September 7 that they will issue more stimulus policies to boost property purchases, which will support market sentiments.
In particular, Shenzhen has decided to relax restrictions on purchases of commercial properties and business apartments for residents from Hong Kong and Macau.
Moreover, Shanghai has announced the shortening of work experience requirements for manpower in the Lingang district from six months to three months, and so workers who work there for more than three months will be allowed to purchase residential houses in Lingang, which will increase the demand for real estate.
At the same time, Shanghai has also issued a Notice on Adjustment of the Maximum Loan Period for Purchase of Stock Housing by the Housing Provident Fund in the City, stating the longest loan period may extend from 15 years to as long as 30 years, which will accordingly reduce monthly mortgage payments and ease the repayment pressure on home buyers, especially for second-hand houses which have existed for around 20 years already. Homeowners of those second-hand houses with 20 years existence will benefit from this policy and their demand for housing improvements will be increased.
In China, following reductions in downpayment ratios, decreases in mortgage interest rates and adjustment of the eligibility criteria for first-time homebuyers, property transactions continue to increase, while the new measures in Shanghai and Shenzhen will also positively affect the real estate market.