Tuesday, December 16, 2008

China likely to ease restrictions on second-home loan

China is very likely to ease the restrictions on second-home loans as early as the end of this year, the Shanghai Securities News reported on Monday.

The proposal on radically abolish the restriction made by China Real Estate Association (CREA) has been submitted to the State Council, waiting for its approval, according to an unnamed source with the CREA.

Gu Yunchang, vice-chairman of the China Real Estate and Residential Buildings Institute, said the loan restriction of second-house purchasing constraints people's normal need of enhancing housing condition, so the government should put more emphasis on the development of commercial housing.

China's central bank has lowered the down payment threshold from 30% to 20% and allowed domestic commercial lenders to provide favorable policies to support first-home purchase and those who buy self-use housing for improving living conditions.

However, the applicable conditions of "self-use housing for improving living conditions" have not been specified by the central bank. The report cited Industry insiders as saying that the specific regulations are expected to be released by the end of this year.

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