Date
24 August 2017
Shaoxing is said to have joined other local governments in China to ease property curbs. Photo: Bloomberg
Shaoxing is said to have joined other local governments in China to ease property curbs. Photo: Bloomberg

Shaoxing said to cut down-payment for second-home buyers

Authorities in Shaoxing in China’s eastern Zhejiang province are said to have cut the down-payment requirement for purchases of second-homes in a bid to support the flagging property market.

The down-payment was slashed to 40 percent from the previous minimum requirement of 60 percent, China Times reported Thursday, citing a local banking source.

With the move, Shaoxing has joined a host of other local governments in China that have eased their property curbs in recent months.

So far, around 20 cities, mostly second- and third-tier ones where inventories are high, have removed or eased bans on ownership of more than one home, a curb that was imposed in early 2011 to cool the then-hot property market.

The central government has not indicated any shift in nationwide property policy, but has remained silent on the loosening moves by local governments.

China Times cited its source as saying that only local banks have implemented the new policy in Shaoxing, while branches of top state-owned banks have kept their rules on second-home loan mortgages unchanged.

Administratively, central bank is the de facto regulator on any lending policies. However, banks face a ‘dilemma’ when local governments threaten to withdraw fiscal or public funds deposits if banks do not follow their guidance.

A customer manger with a Shenzhen commercial bank was quoted as saying that his firm had suspended mortgage loans before May due to thin margins, but had to resume such lending later as local authorities threatened to revoke the bank’s custodian license for housing provident fund.

Meanwhile, Fujian is also said to have launched new measures to loosen the property market. As long as a buyer sells an existing home and pays off bank loans, local authorities will regard the person as a first-home purchaser, according to the report.

– Contact English@hkej.com

KZ/AC/RC

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