Chinese first-tier cities witness sizzling market amid eased mortgage lending rules

The real estate markets in China's first-tier cities have seen an extraordinary resurgence over the weekend after the metropolises comprehensively relaxed their criteria for "first-time homebuyers" to give more people access to preferential mortgage rates.

Some property sales centers in the first-tier cities remained open around the clock, while certain real estate agencies reported a doubling of their daily transaction volumes, the Global Times learned on Sunday.

"We saw an increase in our client inquiries here in Beijing after Guangzhou and Shenzhen [in South China's Guangdong Province] took the lead to announce new policies on Wednesday," a real estate agent surnamed Li in Beijing's Changping district told the Global Times on Sunday.

"As expected, Beijing and Shanghai quickly followed suit two days later and visitors to our outlet continue to grow," Li said. He works in an outlet of Homelink, a leading Chinese real-estate brokerage company.

After the new policy was introduced, the daily number of transactions for secondhand homes in Beijing reached approximately 510 units, while new home purchases stood at about 400 units, both more than double the figures prior to the policy's implementation, another Homelink agent in Beijing's Chaoyang district said when Global Times reporters called in as clients.

The new policy primarily benefits homebuyers who already own one unit of house and wish to buy a new one for housing improvement purposes, she noted.

According to the policy, homebuyers will be regarded as first-time buyers if they, or their spouses and minor children, do not own property in the city. Regardless of their previous credit records, they can enjoy preferential mortgage rates as first-time buyers.

Besides the four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, many other provinces and cities joined in the fray and eased mortgage lending rules, including East China's Anhui Province, Suzhou in East China's Jiangsu Province and Zhengzhou in Central China's Henan Province.

This policy aims to include a broader spectrum of homebuyers and housing needs within the criteria for first-time home purchases. It plays a positive role in reducing the cost of homeownership, meeting reasonable housing consumption demand, and promoting the stable development of the real estate market, Yan Yuejin, research director at Shanghai-based E-house China R&D Institute, told the Global Times.

A Beijing resident surnamed Qin told the Global Times that after the birth of her child in May, her family's 50-square-meter one-bedroom apartment was no longer sufficient. Initially, she and her husband had planned to rent a two-bedroom apartment for a few years as an interim solution while saving more money to buy a new home. "The new policy has come at just the right time; now we can start planning to sell our [current] house and buy a new one," she said.

The introduction of the policy is accurate, timely and efficient, enabling better fulfilment of the reasonable needs of homebuyers, Yan said.

It is now the traditional peak season for buying homes, which is often referred to as "Golden September and Silver October." It is expected that the real estate market in the first-tier cities will see a boost in transactions starting this month, and this active trend in transactions is expected to continue, Yan said.

Affected by the adjustment of the real estate market, property investment continued to decline over the past two years, affecting overall economic recovery expectations. "The stabilization of the real estate market will provide significant support for an overall economic recovery. It will directly boost the rapid recovery of related industries and drive improvements in macroeconomic indicators such as consumption and investment," Yan said.