Potential homebuyers look at house models in a sales office in Beijing on October 1. Photo: IC

 

 

Both sales and prices of secondhand homes in Beijing rose in October from September, following the easing of controls on housing loans, data from a property brokerage showed on Thursday.

The number of transactions through HomeLink Real Estate Agency involving secondhand homes in Beijing nearly doubled from October 1 to 26 compared with the same period last month, the brokerage said in a research note sent to the Global Times Thursday.

HomeLink also noted that the average price of secondhand homes in Beijing increased by 7.2 percent month-on-month to 28,724 yuan ($4,682) per square meter.

Data released Thursday by another property agency, 5i5j.com, also showed an increase in the average price of secondhand homes in Beijing to 29,944 yuan per square meter in October from 28,476 yuan in September.

Commercial banks in some of China's large and medium-sized cities have implemented the central bank's new policy to ease controls on housing loans, and analysts said this has resulted in signs of improvement for China's house market.

According to a statement released by the central bank on September 30, second-time buyers should get the same treatment as first-time home buyers so long as they have repaid previous home loans.

The People's Bank of China (PBC) said these buyers should get a down payment rate of 30 percent and an interest rate on loans as low as 70 percent of the PBC's benchmark rate, compared with a 50 percent minimum down payment and an interest rate of at least 110 percent of the benchmark rate previously.

But the PBC also said that commercial banks could decide the interest rate based on their own situations.

A member of staff in the credit department of the Chaoyangmen branch of Industrial and Commercial Bank of China (ICBC) confirmed with the Global Times Thursday that ICBC's Beijing branches are following the new policy and offering second-time buyers a 30 percent down payment and interest at 95 percent of the PBC's benchmark rate.

However, there are no commercial banks in Beijing offering a 70 percent interest rate on loans, the staff member noted.

Based on the current financing costs, commercial banks would make a loss if they offered interest rates on housing loans of below 90 percent, the Beijing Times reported Thursday, citing an unnamed insider in a commercial bank. 

"Almost all of the commercial banks in Beijing are following the new policy," Zhang Dawei, marketing director with Beijing-based Centaline Property, told the Global Times on Thursday.

According to a survey by financial search platform Rong360 based on around 400 commercial banks in 23 large and medium-sized cities, about 30 percent of commercial banks are following the central bank's new policy and easing controls on housing loans.

According to data from the China Index Academy, several other cities in China saw an improvement in the property market, such as Shenzhen where the total volume of transactions rose by 42 percent from October 20 to 26 week-on-week, and Suzhou where it rose by 22 percent.

Buyers who have small-sized apartments and want to trade up are the most important force pushing up the home prices, Zhang Xu, a member of the market research center at HomeLink, told the Global Times on Thursday.

In addition, some first-time home buyers who were waiting to enter the market have now decided to make purchases, which has also contributed to the price increase, Zhang Xu noted.

Recent stimulus policies launched by the central and local governments, such as the canceling of home purchase restrictions in several cities, will continue to boost the market, but the real estate industry is still burdened with overcapacity, Li Jingguo, a research fellow at the Institute for Urban and Environmental Studies under the Chinese Academy of Social Sciences, told the Global Times on Thursday.