Potential homebuyers look at a property model in Huai'an, Jiangsu province.Photo:Xinhua

Some Chinese cities have moved to cut the down payment ratio for home buyers in order to stimulate the property market after Evergrande's debt woes continue to dent buyer confidence.

Real estate agencies in Southwest China's Chongqing said that a number of local banks have reduced the down payment ratio for home loans to 20 percent for buyers with no mortgage history during the Spring Festival, following the cut of the down payment ratio for home loans in Heze, East China's Shandong Province and Ganzhou, East China's Jiangxi Province.

The down payment is a large sum of money that the buyer pays upfront in a real estate transaction, and the standard down payment ratio, accepted by Chinese lenders, is 30 percent of a home's price.

An agent from a Chongqing-based property developer said in 2021, the down payment ratio for housing loans in Chongqing had been reduced to 20 percent, but fewer home buyers could meet the strict requirements, which included stable employment and age caps. 

Another agent said that after the Spring Festival, more banks are now offering the reduced down payment ratio, with requirements for home buyers being relaxed.

The property policy in Chongqing banks came after that home buyers in Heze city and Ganzhou city had been allowed 20 percent of down payment ratio earlier this week.

"The down payment ratio cuts are implemented in cities which have no curbs on home buying," Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Sunday.

Yan said that the lower down payment ratio will help boost demand and stabilize the property market, and he is urging more local governments to roll out flexible policies to bolster sustainable home consumption.

Global Times