China property support moves spur buying spree in Beijing and Shanghai, but concerns swirl demand may not be sustained
- Beijing and Shanghai nod to more ‘first-time’ homebuyers, allow them cheaper mortgage loans, lower upfront payments
- Aggregate transaction volumes in the primary and secondary markets in the two cities jumped by 100 per cent and 200 per cent after the move
The mainland’s two most developed metropolises announced on Friday that more residents would qualify as “first-time” homebuyers, giving them access to cheaper mortgage loans and borrow with lower upfront payments.
Aggregate transaction volumes in the primary and secondary markets in Beijing and Shanghai jumped by 100 per cent and 200 per cent, respectively, compared with the previous weekend, according to initial data from the Centaline China Research.
CGS-CIMB Securities managing director Raymond Cheng said it was an encouraging response to the policy moves.
“We were surprised by the strong response post-policies, despite the challenging economy, which we think signals robust genuine housing demand in China,” he said in a research note on Monday. “In our view, the regulators appear decisive in helping the sector as both policies will be implemented immediately.”
Beijing and Shanghai residents, who do not own property in major cities became first-home buyers on Saturday as authorities looked past their previous credit records. In the past certain categories of people who had taken out a mortgage – even if fully repaid – were disqualified from being considered first-time homebuyers in major cities.