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Ningbo eases up on housing curbs
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THE city of Ningbo eased home buying restrictions yesterday after two other cites in the Yangtze River Delta lifted property purchase limits earlier this week.
The three cities witnessed a sales slump as prices surged, the economy slowed and credit tightened, dampening market demand in one of China’s richest regions, where property speculation had previously meant the cost of homes in smaller cities were comparable to those in Beijing and Shanghai.
Reduced enthusiasm for real estate led to less revenue from land sales and increased financial risks in Zhejiang Province, which reported the country’s highest ratio of non-performing loans.
Shanghai home buyers can now obtain mortgage rate discounts that were unavailable in previous months. The Agricultural Bank of China, one of the country’s biggest banks, offered a 5 percent discount on interest rates to customers borrowing at least 2 million yuan (US$324,000) for their first home.
So far, around 20 cities, mostly second- and third-tier ones where inventories are high, have lifted or eased bans on the ownership of more than one home, imposed in early 2011 as a tool to cool the property market.
Back then, more than 40 cities made use of the limits along with higher mortgage rates and bigger down payments on second homes. Three years ago, high home prices were among the top complaints of urban residents.
The central government has not indicated it will shift its property policy. Instead, quicker reforms, infrastructure construction, and loosening credit for the economy have been used to offset the impact of the real estate slowdown.
According to the National Bureau of Statistics, new home prices in 55 of 70 major cities showed month-on-month declines in June, compared with 35 in May.
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