Shanghai, Beijing relax housing policies to boost home ownership

In response to the evolving housing demands of residents, both Shanghai and Beijing have announced adjustments to their housing policies, aiming to better address the needs for both essential and improved living spaces.

Starting from Friday (December 15), Shanghai will adjust its definition of "ordinary housing" to no longer include a price limit. This means that all homes that meet the other criteria, such as being five stories or higher and having a floor area of 144 square meters or less, will be considered ordinary housing.

Previously, the price of ordinary housing, which are eligible for lower transaction tax rates, had to be under 2.3 million yuan (US$322,230) to 4.5 million yuan according to its location.

Shanghai will also lower the minimum down payment requirement for first-time homebuyers from 35 percent to 30 percent. In the city's "five new cities" and other key development areas, the minimum down payment requirement for second-time homebuyers will be cut from 50 percent to 40 percent.

These adjustments aim to foster high-quality development in crucial regions and maintain equilibrium among residential, commercial, and industrial components.

Meanwhile, Beijing has introduced similar changes to its housing policies, effective from January 1, 2024. The Chinese capital has slashed down payment requirements for second homes to 40-50 percent depending on the location, a significant reduction from the previous 60-80 percent.

Additionally, the city has lowered the minimum down payment for first homes to 30 percent.

Beijing also expanded the definition of "ordinary homes" for the first time since 2014. This will allow more residences to qualify for lower mortgage thresholds. The maximum loan term for personal housing loans has been extended to 30 years.