Beijing Joins the Home Sales Drive by Easing Mortgage Rules

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Beijing reduced the floor on mortgage rates to as low as 3.5%

Beijing has slashed downpayment and mortgage rates for homebuyers, becoming the last of China’s mega cities to try and kickstart its ailing housing market.

Authorities in Beijing, home of nearly 22 million people, announced a reduction in the downpayment first-time homebuyers need to find from 30% to a minimum of 20%. Downpayment requirements for second home buyers were lowered to between 30% and 35% depending on location, from a previous rate of 40% to 50%.

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Beijing cut downpayments for first-time homebuyers to 20% and second home buyers to 30-35%, and reduced mortgage rates to as low as 3.5%.
The People’s Bank of China scrapped the nationwide minimum mortgage rate and cut minimum downpayment ratios to 15% for first-time buyers.
Cities, including Shanghai, Guangzhou, and Shenzhen, have eased home purchase requirements; national new home prices fell 0.71% in May.

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What Happened When

May 2024：: Mortgage rates on first homes averaged 3.45% in 100 cities monitored by Beike Research Institute (BRI). For second homes, the average rate fell to 3.9%.

May 2024：: New home prices in 70 cities slid 0.71% from April 2024, marking the most significant drop since October 2014.

Late May 2024：: The People’s Bank of China scrapped the nationwide minimum mortgage interest rate while cutting the minimum downpayment ratio to 15% for first-time buyers and 25% for second-home buyers.

AI generated, for reference only