In an attempt to rescue its property market, Zhengzhou, the capital of central Henan province, has become the first city in China to relax the curbs on second home purchases.
The local authority has announced 19 measures to support real estate development. The notice guides financial institutions to provide more housing mortgage loans and lower interest rates.
Article 19 aims to support housing demand, increase the housing market’s supply, enhance credit support, promote rehousing, and optimize the real estate market environment.
In particular, the down-payment ratio for one-house owners without an outstanding mortgage, who attempt to purchase their second home, reduces by half to only 30%.
Following Zhengzhou, other local authorities also take measures to reverse a nationwide residential property market slump. For instance, Zhongshan and Xinxiang have increased the quotas for provident loans.
In January 2022, new home prices in China’s 70 major cities showed the weakest rise of 2.3% year-on-year since December 2015, amid lingering concerns about the property downturn. In the same month, home transactions by floor area in Zhengzhou dropped 45% from a month earlier, according to CRIC data.
These relaxing policies show the city’s government is seeking to bolster buyer sentiment and boost residential property sales.