Published: 14:20, May 17, 2024 | Updated: 17:55, May 17, 2024
China unveils step to help stabilize property market
By Xinhua
This photo taken from the Wangjiang Pavilion Park shows residential buildings near the Jin River in Chengdu, capital of Sichuan province, China, on Oct 20, 2023. (GARY CHIU / CHINA DAILY)

BEIJING - China on Friday cut the minimum down payment ratios for individuals' commercial housing mortgages and abolished mortgage floor rates nationwide as the country moves to boost the property market.

The People's Bank of China and the National Financial Regulatory Administration announced that the minimum down payment ratios for individuals' commercial housing mortgages will be lowered to 15 percent for first-home purchases and 25 percent for second-home purchases.

The PBOC said in a separate statement on its website that the floor level of commercial mortgage rates for first and second homes will be canceled across the country.

According to the PBOC, the country will also cut the loan rates of the individual housing provident fund, a long-term housing savings plan made up of compulsory monthly deposits by both employers and employees, by 0.25 percentage points from May 18

Central bank branches can determine the lower limits of commercial mortgage rates in accordance with local conditions, and financial institutions should set the floor lending rates based on their business conditions and borrower risks, the central bank said.

ALSO READ: China property market expected to see sound spring recovery

According to the PBOC, the country will also cut the loan rates of the individual housing provident fund, a long-term housing savings plan made up of compulsory monthly deposits by both employers and employees, by 0.25 percentage points from May 18.

The central bank also announced it would establish a 300-billion-yuan ($42.25 billion) relending facility to support the government-subsidized housing project.

Local state-owned enterprises are encouraged to use the funds to buy reasonably-priced commercial homes that have completed construction, Tao Ling, an official with the PBOC, told a press conference, adding that these homes will then be used to provide affordable housing.

Potential homebuyers check out a residential property model at a real estate developer's office in Taiyuan, Shanxi province, in November 2023. (PHOTO / CHINA NEWS SERVICE)

Also on Friday, Chinese Vice-Premier He Lifeng called for efforts to address risks concerning unfinished commercial housing projects, ensure the delivery of housing projects, and push forward the de-stocking of commercial housing.

Local governments of regions with commercial housing stock are allowed to buy some homes at reasonable prices and provide them as affordable housing, He said at a teleconference about ensuring the delivery of housing projects.

READ MORE: China eyes affordable housing, urban village renovation

He also urged continued initiatives to fend off and defuse debt risks concerning property developers, and ensure the delivery of housing projects.