Payment requirement for some second homes lowered

China lowered down payment requirements for some second homes, further easing mortgage policies as the government seeks to prop up the property market and counter an economic slowdown.
The People’s Bank of China cut the minimum down payment to 40 percent from 60 percent for some people buying a second home before paying off an existing mortgage. The central bank made the announcement on its website.
Yesterday’s move adds fuel to the central bank’s efforts to arrest a slide in home prices and spur growth in an economy that the government targets to expand at its slowest pace in 15 years. New-­home sales slumped 17 percent in the first two months of 2015 from a year earlier despite a move in September to relax mortgage restrictions, as well as two interest-rate cuts since November.
More supportive policies “may not help much,” Credit Suisse Group AG’s Hong Kong-based property analyst Jinsong Du wrote in an e-mailed note today before the announcement. Du said developers had already been offering down payments below the official level in some cities. “The national housing market should stay weak,” Du said.
Futures on the FTSE China A50 Index rose as much as 0.8 percent in Singapore trading after the close of mainland markets.
The number of cities with month-on-month price declines rose in February to 66 from 64 in January among the 70 tracked by the government, after falling for three consecutive months. Industrial output, investment and retail sales missed analysts’ estimates in January and February, suggesting more stimulus is needed to boost the world’s second-largest economy.
In September, the central bank broadened homebuyers’ access to lower down payments and mortgage rates that were originally designed for purchasers of first homes. New-home sales recorded the first year-on-year increase in 12 months in December only to fall again in January and February. Bloomberg