Mainland China property sales tipped to grow 5 per cent in 2016

Home prices and sales on the mainland are set to grow 5 per cent next year, aided by further government policy easing, according to global ratings agency Standard & Poor’s (S&P).

“To maintain GDP growth at 6.5 per cent next year, the Chinese government will continue to take supportive measures for the real estate sector,” S&P credit analyst Dennis Lee told a media briefing on Monday.

The central government has introduced a series of measures since late last year to help the property sector recover, including rate cuts and lifting home buying restrictions. As a result, housing sales increased 18 per cent year on year in the first 10 months of this year.

The National Bureau of Statistics has said it expects the adjustment in the housing market will continue as inventory levels in smaller cities remain high.

At a government meeting early this month, President Xi Jinping urged the reduction of property inventory so that the property sector could enjoy sustainable development.

Ningbo, a third-tier city in East China, announced on Monday that it would lower the down payment ratio for loans to some second home buyers from its housing provident fund from 30 per cent to 20 per cent. North China’s Shanxi province decided last week to remove purchase restrictions on the age and residency status of buyers and the number of houses they are allowed to buy.