Announcement of Measures to Stimulate the Housing Market
Expectations Rise for Eased Home Purchase Restrictions in Major Chinese Cities
Chinese authorities are making a concerted effort to revive the long-stagnant real estate market. The government has announced measures to stimulate the housing market, such as easing home purchase requirements in the capital city of Beijing and revising regulations on loan interest rates.
According to state-run Xinhua News Agency and other sources on December 26, four agencies-the Beijing Municipal Commission of Housing and Urban-Rural Development, the Beijing Municipal Development and Reform Commission, the Beijing branch of the People's Bank of China, and the Beijing Housing Provident Fund Management Center-recently issued a notice titled "Further Optimization and Adjustment of Real Estate-Related Policies in Beijing" (hereinafter referred to as the "Notice") and implemented it immediately.
Beijing, China has introduced measures to revitalize the housing market, including easing home purchase requirements and revising loan interest rate regulations. The Chinese real estate brokerage platform Anjuke
The core of these measures is to relax home purchase eligibility requirements and lower mortgage rate regulations, particularly for households without hukou (household registration) and for families with multiple children. For households without hukou purchasing homes within Beijing's Fifth Ring Road, the previous requirement of paying income tax for the past three years has been eased to two years. In areas outside the Fifth Ring Road, the requirement has been relaxed so that just one year of income tax payment is sufficient for home purchase eligibility. In addition, families with two or more children are now permitted to purchase one additional home within the Fifth Ring Road. The Fifth Ring Road refers to the fifth ring expressway encircling Beijing. Generally, areas inside the Fifth Ring Road are considered "urban," while areas outside are regarded as "suburban." This distinction affects regulatory standards and price differences in Beijing's real estate market.
Hukou serves as a form of identification and a means of controlling population movement in China. To purchase a home in major cities such as Beijing, one must either possess local hukou or meet certain eligibility requirements, such as paying income tax for a specified period in the area.
In addition, the mortgage interest rates, which were previously applied differentially based on the number of homes owned, can now be set autonomously by financial institutions.
In the Notice, the Beijing municipal government stated that it has further optimized and adjusted home purchase restriction policies to better meet residents' essential housing needs and various housing improvement demands. These measures signal an intention to simultaneously loosen administrative, financial, and supply-side policies in order to break the deadlock in Beijing's housing market, where private demand has virtually stalled due to the prolonged real estate downturn.
There are also observations that these measures have led to the relaxation of home purchase restrictions in major cities across China. Li Yuzhe, a researcher at the Guangdong Housing Policy Research Center, said, "Since the second half of this year, major cities have been rolling out policies to support the real estate market one after another," adding, "Since Beijing has taken the lead in easing regulations, it is highly likely that other major cities such as Shanghai and Shenzhen will follow suit."
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