2015-03-24

First Tier Cities Ease: Shanghai May Up Public Housing Fund Credit Limits by 75%

First-tier cities have eschewed bailouts as recently as last month, but now there is a possible bailout brewing in Shanghai. The policy shift would increase the credit limit for buyers tapping the Public Housing Fund (funds are paid in by individuals and their employers) by 75%. Individuals will be able to borrow ¥700,000, up from ¥400,000. A family can borrow double the individual amount.

Shanghai officials did not deny an increase is under discussion. At the start of this year, Beijing upped its credit limits by 50% for first-time homebuyers purchasing an apartment of 90 sqm or less. Local bailouts have also begun in Fujian province, Jinan and Guangzhou. See: MoH and PBOC Plan More Housing Bailout Measures, Cut Down Payments and Reduce Mortgage Rates

The reason for these latest moves is the weak sales data in January and February, which surprised the market and govt. With all optimism now focused on March-April, it is do or die time for housing.

Shanghai fund personal loan amount is brewing up-regulated rate may reach 75%, which indicates that a new wave of real estate or policies, including first-tier cities, including the "spring" soon.

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