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Beijing Lowers Down-Payment Requirements to Stimulate Housing Demand

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  Published in House and Home on Wednesday, December 24th 2025 at 9:57 GMT by reuters.com

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Beijing Softens Home‑Buying Rules to Revive a Cooling Market

December 24, 2025 – Reuters

In a move that could signal a broader easing of China’s stringent housing‑market restrictions, Beijing’s municipal government announced a suite of policy changes aimed at reducing the cost of purchasing a home. The new measures are the latest in a series of steps that Beijing has taken over the past year to boost demand in a market that has seen its prices tumble after the central government’s “three‑red‑lines” policy and a nationwide tightening of credit.

What the new rules actually change

1. Down‑payment requirements
   The city has lowered the minimum down‑payment for first‑time home buyers from 30 % of purchase price to 20 %. For second‑home buyers, the requirement is cut from 35 % to 25 %. The reduction is intended to free up liquidity for households that have been saddled with high upfront costs, a particular burden for younger families and those who have yet to build wealth.

2. Loan‑to‑Value (LTV) ratios
   LTV limits, which dictate the maximum amount a bank can lend against a property’s value, have been increased. For primary residences, the LTV ceiling rises from 80 % to 90 %. Second‑home buyers may now borrow up to 85 % of a property’s value. This shift is designed to make mortgage financing more accessible and to mitigate the risk of over‑leveraging that was a concern under the previous “three‑red‑lines” framework.

3. Credit‑score thresholds
   The credit‑worthiness criteria that lenders use to approve mortgages are being relaxed. Instead of a fixed credit‑score cut‑off, banks will be permitted to consider a wider range of financial indicators, including employment stability and income growth, when underwriting new loans.

4. Mortgage term flexibility
   The city is allowing banks to offer longer repayment terms for new mortgages. While the standard loan duration has typically been capped at 30 years, the new policy permits 35‑year terms for certain qualified borrowers, thereby lowering monthly payments and improving affordability.

5. Local incentives
   To encourage home ownership in the city’s outskirts, where housing supply has remained relatively under‑utilised, the Beijing government has introduced a modest subsidy that can be applied toward down‑payments for properties in designated growth zones.

Why Beijing is easing the rules

The policy shift follows a series of downward‑sloping price trends that have emerged in Beijing’s property market over the past two years. According to data released by the China National Bureau of Statistics, residential property prices in the city fell by 6.5 % YoY in Q3 2025, the steepest decline among the nation’s top‑tier cities. Housing sales volumes also slipped, with fewer than 300,000 units sold in the third quarter—a 12 % drop from the same period in 2024.

Experts argue that Beijing’s easing is part of a broader attempt by the central government to curb a housing‑market slowdown that could ripple across the economy. In a statement released to the press, the municipal Housing and Urban‑Rural Development Bureau said: “We are tightening the balance between ensuring market stability and encouraging healthy housing demand. The measures announced today are consistent with the national goal of maintaining a stable, orderly, and healthy development of the real‑estate sector.”

The policy moves also align with the central bank’s recent monetary stance. In a policy meeting held earlier this month, the People’s Bank of China (PBOC) signalled a readiness to keep interest rates at historically low levels and to maintain ample liquidity in the banking system. The easing in Beijing is expected to dovetail with these monetary signals, helping to lift consumer confidence and stimulate domestic demand.

Market reaction and next steps

Initial reactions from industry analysts have been cautiously optimistic. “If these changes translate into a tangible reduction in the cost of entry for home buyers, we could see a modest uptick in demand in the coming quarters,” said Li Hua, a senior analyst at China Real Estate Investment Group. However, some caution that the real‑world impact may be muted if the easing is perceived as a temporary measure or if credit conditions remain tight at the national level.

The Beijing municipal government has set a timeline for implementation: the down‑payment and LTV changes will take effect immediately, while the credit‑score relaxation is scheduled for rollout over the next six months. The city will monitor the policy’s effectiveness closely and may adjust the parameters in response to market feedback.

This move by Beijing adds to a series of similar steps across China’s major cities. In recent weeks, Shanghai, Shenzhen, and Guangzhou have each announced measures to lower down‑payment requirements and LTV ratios for first‑time buyers. The coordinated push reflects the central government’s broader goal of avoiding a “real‑estate‑market bust” that could trigger a broader economic slowdown.

Looking ahead

As Beijing relaxes its home‑buying curbs, the city’s real‑estate market will be under close watch by policymakers, investors, and consumers alike. Whether the easing will revive a stagnant market or simply serve as a temporary relief remains to be seen. The central government’s next‑step will likely involve a delicate balance between supporting housing affordability and preventing speculative bubbles.

For now, Beijing’s new policy stands as a clear sign that the city’s authorities are prepared to take proactive steps to keep the housing market functioning within a healthy range. The full impact of these changes will become evident as they roll out over the coming months, but the shift is a notable pivot from the hard‑line stance that has characterised Chinese real‑estate policy in recent years.