Tuesday, December 30, 2008

New Shanghai Measures To Boost Property Market

Source : The Business Times, December 30, 2008

(SHANGHAI) Shanghai, China's financial hub, has issued new measures to make it easier for people to buy their second homes in a bid to help its ailing property market.

Shanghai citizens will now be allowed to buy second homes on the same preferential mortgage terms enjoyed by those buying their first homes, the city government said in an announcement posted on its official website (www.shanghai.gov.cn) on Sunday.

It did not place any restrictions on what kind of families can enjoy the favourable terms - a further relaxation from a State Council announcement earlier this month, which said that the lower rates would be given only to families whose per capita living area is smaller than the local average.

Just last year, China had made it more costly for homebuyers to obtain mortgages for their second homes, worried about then-rocketing property prices swelling into a bubble.

But with the real estate market losing steam quickly, China has shifted gears and is now attempting to prop it up.

Shanghai is the first city to further loosen rules after the State Council announcement, which cut property transaction taxes and encouraged banks to lend more to developers for acquisitions.

The Shanghai government also said that families could borrow up to 600,000 yuan (S$127,200) from the local housing fund to buy a second home - an increase from the 200,000 yuan previously allowed.

China has unveiled a slew of measures in recent months to stimulate domestic housing demand as part of its campaign to support economic growth amid the global financial crisis. -- Reuters

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