China eases property curbs as stimulus hopes spark bull run in equities
PBOC slashes down payment for homebuyers after hopes for stimulus measures fuel stock rally
The People's Bank of China yesterday slashed the down payment needed to buy second homes in the country to 40 per cent after expectations of further stimulus measures had earlier powered mainland stocks to a seven-year peak.
The Hong Kong market rang up its biggest daily gain in two months as investors bet on more stimulus by Beijing to re-energise the country's cooling economy.
The PBOC said on its website that all banks "are encouraged to offer commercial support to families to buy their own home … with the down payment not lower than 40 per cent" for second-home buyers from 60 to 70 per cent.
The finance ministry also announced yesterday that sellers of ordinary homes would be exempted from a 5.6 per cent transaction tax after owning the property for two years. The measure will take effect today.
The impact was well anticipated by the stock markets, which were also pricing in a potential cut in interest rates or the official required reserve ratio.
The mainland's main indices, the CSI 300 and the Shanghai Composite, both jumped nearly 3 per cent to their highest levels since March 2008, while Hong Kong's benchmark Hang Seng Index rose 1.5 per cent.