Chongqing - On October 14, Southwest China's Chongqing municipality raised the maximum housing provident fund loan to 800,000 yuan (about USD 112,463) and reduced the minimum down payment for second homes to 20%, offering more financial flexibility to buyers.

The property sales office of Haicheng Yunhujun, Yubei District, Chongqing. (Photo/Haicheng Group Co., Ltd)

The notice raises the maximum housing provident fund loan for individuals from 500,000 yuan to 800,000 yuan and for families from 1 million yuan to 1.2 million yuan. For multi-child families, the individual limit is now 1 million yuan, and the family limit is 1.6 million yuan.

"The increased loan amounts for individuals and multi-child families provide stronger support for new citizens and young families while also reducing interest costs and easing repayment pressures," said a Chongqing Housing Provident Fund Management Center spokesperson. "For instance, a 1.6 million yuan loan over 30 years could save depositors about 150,000 yuan in interest compared to a commercial loan."

Additionally, the policy lowers the minimum down payment for second-home buyers to 20%, aligning it with first-home requirements. This aims to reduce the financial burden and boost buyers' purchasing power.

The new policy also supports flexible workers by allowing eligible individuals to convert their commercial housing loans into housing provident fund loans, expanding access to the housing fund system.

Since late September, over 50 cities, including first-tier cities like Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, Nanchang, Hefei, and Guangyuan, have implemented real estate market optimization policies. These measures led to a surge in property market activity during the National Day holiday.

For example, Shanghai eased its housing policy for non-residents by reducing the one-year social insurance or tax payment requirement and lowering the first-home down payment to 15%. Shenzhen lifted restrictions on commercial housing transfers, while Guangzhou became the first city to remove purchase limits for non-residents and singles altogether.

In Beijing, non-residents' social security payment requirement was reduced from five to three years within the fifth ring and to two years outside it. The minimum down payment was lowered to 15% for first and 20% for second mortgages.

During a press conference on October 8, Zheng Shanjie, Chairman of the National Development and Reform Commission, emphasized the importance of stabilizing the real estate market. He highlighted ongoing efforts to reduce mortgage interest rates and loosen purchase restrictions in several cities.

"The central government's goal of stabilizing the real estate market is clear, and we can expect further measures like lower mortgage rates, transaction fees, and taxes," said Guo Xinyu, an analyst at China Index Holdings Limited (CIH). Guo added that first-tier cities may relax suburban restrictions, while second and third-tier cities could see more subsidies to boost market activity.