Source: AFP
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Shanghai has eased rules on buying real estate in the city as local governments across China aim to ease a painful property crisis that is dragging down the economy.
Many cities imposed restrictions and strict credit requirements on housing markets a decade ago in an effort to curb soaring prices and rampant speculation.
But now they are reversing those policies in an effort to stave off an economic downturn marked by a debt crisis among developers, weak demand and falling prices.
On Monday, economic powerhouse Shanghai — China’s largest and richest city — said it would reduce the number of years people had to live there before they could buy property. Buyers must have lived in the city for only three years, instead of five.
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The megacity also said it would lower the minimum down payment for residential mortgages to 20 percent, as well as allow families with two or more children to buy an additional home.
The announcement followed similar moves in major Chinese cities such as Hangzhou and Xi’an this month to ease purchase restrictions for first-time buyers.
And the central government has moved in recent weeks to stem the crisis in the real estate and construction sector, which has long accounted for a quarter of gross domestic product.
This month, Beijing cut the minimum down payment rate for first-time home buyers to its lowest level in history and suggested the government could buy unused commercial real estate.
No details were given on how many homes will be purchased.
Source: AFP