Shanghai eases homebuying rules as China boosts aid

Shanghai has relaxed homebuying regulations, allowing non-residents to purchase homes after one year of social security or tax payments.

China’s financial hub of Shanghai eased rules for homebuyers, the first top city to follow through on central government’s latest aid for the embattled property sector.

A drone view of an under-construction residential development by Country Garden in Shanghai, Chin. Downpayment ratios are lowered, effective Oct. 1, as part of measures to stabilize the struggling property sector amid economic challenges. (Reuters)

The city will make it easier for those without local household registration to purchase homes by shortening the number of years they need to pay social security or individual tax to one year from three years previously, according to a statement late Sunday. Those who’ve paid social security or tax for three years will be allowed to purchase the same number of properties as local residents — a move that will let them buy at least two homes, compared with just one earlier.

Shanghai also reduced downpayment ratios to a minimum of 15% for first-time buyers from 20% previously. Those buying second homes in the city center will need to make a minimum downpayment of 25%, while rates for homes outside those areas will be cut to 20%, down from 30% previously. The rules will take effect from Oct. 1, according to the statement.

The central bank on Sunday also announced that it will allow refinancing of mortgages. The move, confirming earlier reports by Bloomberg News, underscores China’s urgency to stem a housing-led slowdown in Asia’s largest economy as it faces the prospect of increasing protectionism and a shaky global outlook.

China in late September unveiled its biggest package yet to shore up its beleaguered property market, lowering borrowing costs on as much as $5.3 trillion in mortgages and easing down-payment requirements for second-home purchases to a historical low.