Authorities in Beijing and Shanghai said they would let first-home buyers enjoy preferential mortgage rates regardless of their previous credit records, joining the fray to ease financing rules to spur a slowing housing market, reports the South China Morning Post. Homebuyers will be regarded as first-time buyers if they—or their dependents—do not own property in the city starting from September 2, according to a statement by the central bank, the financial regulator and the housing ministry. That would make such buyers eligible for smaller down payment requirements and lower borrowing rates.
Applying the easing to “tier-one cities” such as Beijing and Shanghai “will definitely drive home sales in the short term,” said Fitch Ratings’ analyst Zhang Shuncheng. “The policy was used to be implemented in lower-tier cities.
With a population of 25 million residents, Shanghai is the largest metropolis to be chipping away at the raft of restrictions enacted since 2017 to cool a speculative property market. Hot on the heels of Shanghai’s announcement, Beijing said it was also relaxing its lending rules.