GUANGZHOU relaxed downpayment requirements for first- and second-home buyers Sunday, the first local housing market stimulus rolled out by a top-tier city.

    The third largest city in terms of gross domestic product (GDP) in China lowered the downpayment ratio under the housing provident fund policies, allowing first time homebuyers to pay 20 percent, down from 30 percent, for apartments smaller than 144 square meters.

    For second-home buyers, the downpayment ratio was lowered to as low as 30 percent from 60 percent.

    The local authority also relaxed the rules for non-permanent residents to allow more people eligible for borrowing mortgage loans under the housing provident fund, which are usually 1 to 2 percentage points lower than bank loans.

    “Guangzhou’s housing market recovery is comparatively slow among the four first-tier cities; the latest measures underscore the intention to stabilize and improve the local property market,” said Frank Chen, executive director of property consultancy firm CBRE China.

    China’s new-home prices edged up 0.05 percent in May from April, the first rise in 14 months, with prices in first-tier cities improving by as much as 2.2 percent, a private survey showed.

    The property downturn is one of the biggest drags on the broader economy, which is growing at its weakest pace in decades.

    Chen, however, said the other three top-tier cities — Beijing, Shanghai, Shenzhen — are unlikely to follow suit. He added that local officials are concerned over fast rising property prices in these cities over the past few months, even as values in lower-tier cities continue to slow.

    Most of the lower-tier cities have already introduced local measures since late last year to stimulate housing sales.(SD-Agencies)