May 17, 2024 - 15:49
By asiatimes.com

China unveils property stimuli amid falling sales

China on Friday unveiled an unprecedented package of measures to encourage homebuyers to enter markets, after property sales and investment fell in the first four months of this year.

The People’s Bank of China (PBoC) said it will establish a nationwide program to unleash 300 billion yuan (US$41.5 billion) in cheap funding to help state-owned-enterprises (SOEs) buy unsold homes.

The PBoC and the National Financial Regulatory Administration cut the minimum down payment ratios for first-time purchases from 20% to 15% and second-time purchases from 30% to 25%.

It also said the floor level of commercial mortgage rates for first and second homes will be canceled across the country.

Central bank branches can now determine the lower limits of mortgage rates in accordance with local conditions, the central bank said. Financial institutions should set the floor lending rates based on their business conditions and borrower risks, it added.

The PBoC will also lower the loan rates of the individual housing provident fund, a long-term housing savings plan made up of compulsory monthly deposits by both employers and employees, by 0.25 percentage points from May 18.

Hong Kong-listed Chinese property developers’ shares continued to surge on Friday after many of them more than doubled during the week ended Thursday.

Shares of China Vanke Co increased 19.4% to close at HK$6.84 (88 US cents) on Friday while shares of Sunac China rose 25.9% to HK$1.85.

Agile Group gained 24.3% to 92 HK cents while Guangzhou R&F Properties surged 12.7% to HK$1.33.