China is expecting to see growth in home sales in the mainland next year.
According to the South China Morning Post, the mainland is expecting to experience homeprices and sales to increase by 5 percent in 2016. The government's policy easing will encourage such growth as reported by the Standard & Poor's (S&P) a global ratings agency.
"To maintain GDP growth at 6.5 per cent next year, the Chinese government will continue to take supportive measures for the real estate sector," S&P credit analyst Dennis Lee has share with the media last Monday.
Moreover, according to China's National Bureau of Statistics the modification in the residential real estate market will prevail for as long as supply in smaller cities stay high. China's central government has implemented a chain of actions since late 2015 year to propel the real estate sector towards recovery. For example China's central government has stepped in to lower rates and ease home buying limits. With these, housing sales grew 18 percent in the first 10 months of 2015.
According to the South China Morning Post, in a meeting President Xi Jinping pressed for the reduction of property inventory so that the housing industry could see maintainable progress.
Ningbo is said to have initiated plans to lower down payment ration for loans to certain second home buyers. Last Monday the a third-tier city in East China announced that some second home buyers from its housing provident fund will enjoy the new 20 per cent down payment ratio. Previously it was 30. As for North China's Shanxi province, the purchase restriction will be removed based on the age and residency status of the buyers and lift the restriction on number of houses they are allowed to buy.
According to the South China Morning Post, S&P has seen a possibility for local governments to loosen more policies to the extent of lowering mortgage loan rate and down payments. On the other hand Jefferies, an investment bank, has warned of the repercussion of putting pressure on profitability from the developer's point of view.
