Beijing Further Eases Home-Buying Restrictions to Stabilize Real Estate Market

(Yicai) Dec. 25 -- Beijing has relaxed the home purchase restrictions for non-local registered and multi-child families in the central urban areas of the city to effectively stabilize the real estate market in the capital.Beijing reduced the required period of local social security or individual income tax payments for non-Beijing registered families to buy a house within the city's Fifth Ring Road to two years from three and outside the Fifth Ring Road to one year from two, effective yesterday, according to a new policy jointly issued by multiple local government departments on the same day.In addition, the new policy increases the number of homes that multi-child families registered in Beijing can buy within the Fifth Ring Road to three from two, while those not registered in the city that meet the social security and individual income tax payment requirements can purchase two houses within the Fifth Ring Road.Commercial banks are also required to no longer distinguish between first-time and second-time homebuyers when issuing mortgages, so that those buying a second or subsequent house can enjoy the same interest rates and down payment ratios as first-time buyers.In August, Beijing lifted restrictions on qualified non-local registered residents buying homes outside the Fifth Ring Road, but maintained the original purchase restrictions for properties within the Fifth Ring Road.The latest adjustment to home-buying policies comes against the backdrop of an unabated downward trend in Beijing's house prices.The average floor area price of sold pre-owned homes in Beijing has declined for eight consecutive months, with the drop in the average transaction price per such house being even bigger, industry insiders told Yicai.Beijing's pre-owned home sales reached 14,446 units last month, up 20 percent from October, but down 23 percent from a year earlier, data from the capital's housing commission showed. This month's figure stood at 14,362 units as of Dec. 20, also down year on year.The average price of a pre-owned home in Beijing fell to CNY3.5 million from CNY3.8 million (USD497,970 from USD540,655) last month from June, Guo Yi, chief analyst at a real estate analytics and consulting firm Heshuo Institution, said to Yicai.The supply and demand balance is key to whether prices can stabilize, with the number of pre-owned homes listed in Beijing down to about 157,000 units from last year's high of 176,000, which is still high compared with the market's low point of about 100,000, according to Guo."Only when listings fall back to the 100,000 to 120,000 range can prices in Beijing's pre-owned home market truly stabilize, or even increase," she said.Editors: Tang Shihua, Martin Kadiev