The “one district, one policy” proposal by the Beijing Municipal Commission of Housing and Urban-Rural Development aims to assist families with multiple children and those working in the southwestern district of Fangshan to buy homes there, according to a statement from the commission on Monday. The authorities plan to submit the proposal, whose details have not been disclosed, for approval from more government bodies.
“The sentiment in Beijing’s housing market is showing signs of decline, and the expectation of policy fine-tuning is increasing,” said the China Index Academy (CIA), one of the mainland’s largest property consultancies, in a note on Wednesday. “If the ‘one district, one policy’ initiative is officially implemented, it is expected to provide a reference for other major cities and help further revive sentiment in the country’s property market.”
Beijing has the strictest housing policies in China and rarely sees any easing measures. Each household registered in the city can only buy a maximum of two properties and the down payment ratio is the highest nationwide to curb speculation. Homebuyers have to pay 35 per cent upfront for their first homes, and as much as 80 per cent for the second unit. Shanghai comes next, with as much as 70 per cent upfront payment for second homes.
The local authorities’ proposal comes amid a decline in housing deal activity in Fangshan, which fared particularly poorly among all districts in Beijing last year. New home sales in the district, which is about two hours’ commute to the city’s business and downtown area, sank 48 per cent year on year, higher than the 25 per cent decrease recorded citywide, according to data from CIA.
While details of the policy for Fangshan are yet to be unveiled, market observers expect it may include a cut in the down payment ratio or mortgage rates, or higher loan amounts from the housing provident fund that has a better rate than bank loans.
China’s property rebound to be slow; sector’s contribution to GDP seen declining
To boost home sales, Beijing’s housing authorities are expanding a pilot programme launched last August that allows people aged 60 or above living in the city centre to move to the suburbs to more areas of the city. They only need to put down 35 per cent for their new property despite having a mortgage record for their downtown lodgings, given the mortgage has been paid off.
China is still working on turning around the ailing property market that has been affected by the crisis in the real estate sector and an economy on the mend after three years of the pandemic. The value of national contracted sales grew 3.5 per cent in the first two months of the year from the same period of 2022, the first year-on-year growth since June 2021.However, market observers said the figures are yet to signal a sustainable recovery in the property sector.
“This growth could be only a short-term reaction to a release in pent-up demand following China’s relaxation of tight pandemic restrictions in late 2022,” Alfred Hui, a Moody’s analyst, said in a report on March 29.
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