BEIJING, Aug. 1 (Xinhua) -- China's property sector is expected to revive on incremental policy support as the government reiterates the sector's important role in driving a broader economic recovery.
Stabilizing the construction and property sectors, two "pillars" of the country's economy, is vital to promoting a broader economic recovery, Ni Hong, minister of Housing and Urban-Rural Development, said recently at a symposium with the country's real-estate developers.
The minister's words came after a high-level meeting held in late July that demanded timely adjustment and improvement of policies in the property sector in response to the new situation, stating that "major changes have taken place in the relationship between supply and demand in China's real estate market."
The positive signals from the key meeting have boosted confidence in the real-estate market, said China Index Academy, a property research institution. It added that highlighting the "pillar" role of the property sector indicates the potential for policies to prop up the industry in the latter half of the year.
According to Ni, effective policy steps, such as reducing down payment ratios for first-time homebuyers, lowering mortgage rates and easing purchase restrictions for people wanting to buy a second house, will be firmly implemented.
The government strongly supports the essential housing demands of residents and their need for better living conditions, Ni added, also calling for tax and fee reductions for housing upgrades and replacement.
Experts said the mortgage rates are expected to decrease further, particularly in first-tier cities.
Data from the Beike Research Institute shows that, in July, the average mortgage rate for first-time homebuyers in the country's 100 major cities was at 3.9 percent, with the rate in first-tier cities remaining at a notably high level of 4.5 percent. The down payment ratio for first-time homebuyers in most first and second-tier cities is no less than 30 percent, the data shows.
According to business insiders, in Beijing, first-time home buyers are required to make a down payment of up to 35 percent and can expect a mortgage rate of around 4.75 percent.
"Dozens of core cities, including Beijing, Shanghai, Shenzhen and Guangzhou, adopt a strict purchasing rule for people wanting a second house," said Chen Wenjing, director of research at the China Index Academy, as the second-home down payment ratio can hit as high as 70 or 80 percent in large cities.
As the housing ministry vowed concrete action on easing the restrictions, second-tier cities may move up to abandon the strict rules promptly, and first-tier cities are also expected to relax their rules at a reasonable level, according to Chen.
On Monday, China's State Council, the cabinet, emphasized the need to optimize policies concerning the real-estate market, requiring the introduction of measures conducive to the stable and healthy development of the real-estate market based on different needs and the conditions in different cities.
The tone of recent policy statements has become more positive, boding well for stabilizing the real-estate market, said China International Capital Corporation Limited in a research note, adding that pro-growth policies related to the real-estate market would be introduced soon.
On July 25, China's State Taxation Administration announced guidelines for supporting coordinated development with tax and fee preferential policies, with 19 of the listed policies related to waiving or reducing housing-related taxes.
Megacities, including Beijing, Shanghai, Guangzhou and Shenzhen, have already taken swift action in response to the easing signals.
Over the weekend, Beijing, Guangzhou and Shenzhen said that they would take into account the cities' real-estate situations and work with relevant departments to introduce and implement supportive policy measures as soon as possible. Shanghai vowed on Monday that it would implement the pledges of the top policymakers and take city-specific measures to address people's housing needs.
"First-tier cities announced their views simultaneously, which, to some extent, indicates that relevant governments are actively mulling real estate-related policies," said Yan Yuejin, research director at E-house China R&D Institute. He added that favorable policies to bolster the property sector will be released and implemented in an intensive manner this month.
Chen Wenjing forecast that cities nationwide would speed up adjusting their real-estate policies, saying, "Detailed supportive policies for the property sector in second-tier cities are very likely going to be announced."
A single purchase
