BEIJING, July 24 |
BEIJING, July 24 (Reuters) - China's eastern city of Nanjing has started offering subsidies for some first-home buyers in a bid to spur sales, state media reported on Tuesday, as local governments seek to skirt Beijing's tough measures to tame the property market.
Other second-tier cities may follow suit, which could further weaken the central government's policy tightening stance to cool the country's once red-hot real estate sector, analysts said.
The step by the capital of Jiangsu province came just days after an emergency notice issued by the country's land and housing ministries, which urged local governments to firmly implement the existing property curbs.
Under the new rules, residents who were brought into Nanjing under a program to attract talent will enjoy government subsidies when buying their first homes, the China Securities Journal said.
Such residents will be allowed to borrow money from the local housing provident fund, which offers lower mortgage rates than commercial loans.
Some 30 Chinese cities have in recent months tweaked their policies to make it easier for residents to buy homes, despite repeated pledges by Premier Wen Jiabao to pull home prices down to a "reasonable level".
Last November, Nanjing raised the ceiling of residents' borrowing from the housing fund.
But the city's housing commission said the new move was not a relaxation of the existing home purchase restriction policy but only to boost demand for home buying.
"The number of residents that are eligible for the government subsidies is very small, which will not affect the home purchase restriction policy," an official from the commission told a local property website.
Beijing's property curbs, which were introduced in late 2009, included restricting the number of homes each family can buy, increase down payment ratio and mortgage rate.
China's home prices may stage a "retaliatory rebound" in the coming year, the Chinese Academy of Social Sciences, a top government think-tank, said in a report published in the China Securities Journal on Tuesday.
Such local supports, along with monetary policy easing, have led to signs of warming in the property market, with home sales swinging into positive growth in June for the first time in eight months and home prices stabilising.
China's central bank has cut interest rates twice this year and freed banks to further discount borrowing costs by up to 30 percent more as policymakers made clear they would act decisively to rekindle growth in the second half of 2012.
(Reporting by Aileen Wang and Kevin Yao; Editing by Sanjeev Miglani)
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