Shanghai widens definition of mass market homes
Policy easing measure to boost sales will mean homebuyers pay less tax and can get cheaper loans
Shanghai widened its definition of "ordinary" or mass-market homes last week amid a raft of policy relaxation measures to speed up property sales as inventories rose to a record high.
The move, on the heels of policies to make it easier to borrow from commercial banks and the city's housing provident fund, means homebuyers will pay less tax and qualify for cheaper loans.
However, analysts said it would be unlikely to fuel a rapid pickup in home prices at this time.
It followed a similar step taken by Beijing and analysts expect Guangzhou and Shenzhen will fall in line soon.
These four cities are the only ones that still maintain home purchase restrictions which have been scrapped elsewhere on the mainland in the past few months.
"This is the most forceful policy in Shanghai so far this year," Ding Yuzu, a co-president of real estate services provider E-House (China), said after the announcement on November 13.
Huang Hetao, the research head of Century 21 China Real Estate, agreed but cautioned against being overly optimistic, citing high inventories and meagre mortgage rate discounts even though the new policy would boost short-term transactions.