real estate Photo:Xinhua

First-tier cities, including Shanghai Municipality, Guangzhou and Shenzhen in South China's Guangdong Province, have lowered down payments and interest rates for home purchases in a swift move, echoing the central bank's policy shift on May 17.

The policy changes are expected to further boost confidence and stabilize the housing market, experts said.

Guangzhou has lowered the minimum down payment for first-time home purchases to 15 percent and abolished mortgage floor rates, effective on Wednesday. The minimum down payment ratio for second home purchases has been decreased to 25 percent from the previous 40 percent.

Shenzhen also reduced the minimum down payment for first-time home purchases to 20 percent, with a minimum interest rate of 3.5 percent, effective on Wednesday. 

Shanghai on Monday took the lead among the first-tier cities by announcing a series of policies aimed at making it easier for residents to purchase homes. 

These include reducing the minimum down payment for first-time home purchases to 20 percent, shortening the social security requirement for non-local residents, expanding the area where non-local single individuals can purchase homes and allowing families with two children to purchase an additional property.

"We have been working overtime these days to serve increasing number of consultants," a Shanghai-based real estate agent surnamed Ma told the Global Times on Wednesday. "This may lead to a rise in market activity and trading volume," he added.

The policy shift comes after the People's Bank of China, the central bank, on May 17 released a set of policies to stabilize the real estate market, a pillar industry underpinning the world's second-largest economy.

This includes lowering minimum down payment ratios for individuals' commercial housing mortgages to 15 percent for first-home purchases from 20 percent and 25 percent for second-home purchases from 30 percent and abolishing mortgage floor rates nationwide as the country moves to boost the property market.

According to the latest statistics from Centaline Property, more than 200 cities have implemented a 15 percent down payment ratio for first-time home purchases, and more than 250 cities have abolished mortgage floor rates. Over 80 percent of cities nationwide have started to implement the new property policies announced on May 17.

The frequent introduction of policies in first-tier cities indicates a consistent level of action, which may also suggest that Beijing may soon relax its policies, especially in terms of housing loans, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times on Wednesday.

Yan noted that the risk of the current round of leveraging in the housing market is relatively low and manageable because most buyers are purchasing homes for their own use or for upgrading, rather than for investment speculation.

The intensity of this round of real estate adjustment, from the perspective of loan financing, is unprecedented, and it will have a certain effect on stabilizing the housing market, Tian Yun, a veteran economist based in Beijing, told the Global Times on Wednesday.

"If both the supply and demand sides are gradually opened up, and unified risk regulation policies are implemented, this could help the real estate market return to a healthy track," Tian said.

In a meeting held on Monday, the National Financial Regulatory Administration stressed the need to promote healthy circulation between finance and property, strengthen financing coordination between local authorities and real estate projects, and increase support to affordable housing projects.