China megacities ease homebuying rules to lift ailing property market

BEIJING, China — Three Chinese megacities on Monday eased restrictions on buying homes and Beijing's central bank said it would ask financial institutions to lower mortgage rates, as the country seeks to pull itself out of a housing slump.

The country's teetering real estate market long accounted for around a quarter of China's economy and experienced dazzling growth for two decades.

But a years-long housing slump has become a major impediment to growth as the country's leadership eyes a target of around five percent this year -- an objective analysts say is optimistic given the many headwinds the Chinese economy faces.

Late on Sunday, three of the country's biggest cities said they would make it easier for people to buy homes in measures that would come into effect on September 30.

The southern megacity of Guangzhou -- home to over 14 million people -- said as of Monday, potential homebuyers would no longer have their "qualification for purchasing homes" reviewed, state news agency Xinhua said.

There will also be "no restrictions" on how many homes a person can buy, it added.

The nearby city of Shenzhen also announced that it would ease some purchasing restrictions, with buyers no longer subject to "review of their home purchase qualifications", local media citing authorities said.

And in China's eastern economic powerhouse of Shanghai -- the country's richest city -- authorities said they would reduce the tax burden on some homebuyers and reduce down payments on homes.

The swath of announcements came as China's central bank said Sunday it would ask financial institutions to lower interest rates on existing home loans in a bid to "lower financial burdens on property owners", Xinhua said.

China's leadership last week unveiled a raft of measures to boost the economy in one of its biggest drives in years to kickstart growth.

But analysts warned the "bazooka" stimulus was likely still not enough to boost the flagging property market.