Citizens visit a property developer's sales office in Ningbo, East China's Zhejiang Province, on March 4, 2023. Photo: VCG

More than 20 Chinese cities have adopted a new national policy issued in August that further relaxed the criteria for first-time home buyers, with local authorities announcing stimulus moves such as scrapping purchase restrictions to further spur sales.

The latest moves came on Monday from Qingdao and Jinan in East China's Shandong Province, where local housing authorities lifted purchase restrictions and optimized trading for commercial housing.

Guangzhou in South China's Guangdong Province became the first among first-tier cities to lower the limit of interest rates for first-time home buyers by 10 basis points, the Economic Information Daily reported. The new policy is retroactive to Friday.

The current five-year loan prime rate - a market-based benchmark rate - as announced in August is 4.2 percent, while the lowest mortgage rate for first-time apartment buyers in Guangzhou is 4.1 percent. The new policy means that home buyers could save about 60,000 yuan ($8,269) on a 300,000-yuan, 30-year mortgage, according to the Economic Information Daily.

From September 1 to 10, more than 30 provinces and cities had announced more than 30 policies and measures to optimize the property sector, data from the China Index Academy showed. 

A Beijing-based secondhand property sales manager surnamed Li told the Global Times on Monday that the new policy is favorable for home buyers. He noted a surge in sales compared with the previous month. 

Industry insiders said the property sector is likely to further stabilize amid the easing of mortgage policies and sweeping measures implemented by local authorities, leading to a pick-up in market confidence. 

The combination of national and local housing policy changes has further activated the real estate market, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Monday. 

The market will continue to rebound this month and next, the traditional peak season in China, thanks to a boost from policy support. Housing will become cheaper to buy, and this will also help developers, Yan said.

Inelastic demand will be released and trading-up will take place, lifting sales for both new and secondhand units and improving the sector's outlook, analysts said.

Under the new policy, people are regarded as first-time buyers if they, or their spouses and minor children, do not own property in a city, regardless of their previous home ownership or mortgage records.

The overall market response to the national policy change has been positive, and home purchase intentions increased by 15 percentage points overall and by more in the first-tier cities, Pu Zhan, an official from the Ministry of Housing and Urban-Rural Development, said. 

Four state-run banks will reduce mortgage rates on September 25, with banks and borrowers encouraged to negotiate a rate change or arrange refinancing of existing mortgages.

Global Times