Housing provident fund loan policies have been amended in more than 20 mainland cities to make it easier for applicants to raise loans, according to Centaline Property Agency.
The latest amendment came in Wuhan, where the municipal government changed the conditions under which residents may raise loans from the fund to buy non-local property, and raised the loan quota from 400,000 yuan (HK$492,000) to 600,000 yuan for secondary transactions.
The provident fund system was introduced in Shanghai in 1991, soon followed by other cities, and was then propagated as national policy from 1994.
The funds are similar to housing fund programmes in other countries and combine saving and retirement accounts with subsidised mortgage rates to encourage employees to save towards buying their own houses. It is a form of involuntary savings to assist home financing, with both the work unit and the individual contributing to a common account.
Centaline said more than 20 cities had already implemented housing provident fund loan policies that were more favourable to homebuyers.
The Shenzhen city government, for example, raised the maximum loan that could be raised from the fund from 800,000 yuan to 900,000 yuan, while Kunming has indicated it will raise the loan ceiling and relax repayment periods.