China plans to give first-time home buyers financial support but will keep a crackdown on property speculation in place, the Minister of Housing and Urban-Rural Development was quoted as saying by Xinhua on Friday. This marks a subtle change in China's two-year-long campaign to take the heat out of the real estate market, efforts that have driven down property sales nation-wide and home prices in an increasing number of cities.
"China will unswervingly stick to measures to cool the property market and will continue its differentiated credit and tax policies," Minister Jiang Weixin was quoted as saying. "We will support residents' reasonable housing demand and will prioritise mortgage demand for those buying their first homes." His remarks are in line with analysts' expectations for a loosening in mortgage rules for non-speculators as Beijing fine-tunes its monetary policy to ensure the world's second largest economy does not slow sharply.
"The overall tightening stance will stay," said Tao Qi, a senior analyst with real estate consultancy Centaline in Shanghai. "(Jiang's) remarks will not change developers' expectations of a gloomy outlook next year." Many of China's biggest developers, including China Vanke and Evergrande Real Estate, have slowed construction and suspended land purchases in anticipation of a deepening downturn in the property market.
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