|Central bank cuts downpayment rate in China to 40pc
China's central bank lowered the minimum downpayment levels on second homes nationwide, scrapping a key policy originally aimed at controlling housing prices.
The People's Bank of China, the central bank, said the minimum deposit for individuals buying additional housing would be set at 40 percent, according to a statement on its website.
The level was previously 60 to 70 percent, Xinhua said.
The PBoC said the move was aimed at “supporting residents' home ownership and improving housing demand.’’
The announcement rolls back a four-year-old policy first introduced to try to cool the then red-hot property market as rocketing prices put homes out of the reach of many, raising worries over social unrest.
“The cut [in down payments] will strongly support the property market... especially in first- and second-tier cities,'' Le Jiadong, a property analyst at Guangfa Securities, told AFP.
“Introducing this policy at this time fits the situation of the property market's development,'' he said, adding expectations had been for the government to cut the downpayment level to 50 percent.