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Has spring sprung for housing sector?

(Xinhua) Updated: 2015-04-02 09:30

Has spring sprung for housing sector?

Residential buildings as the sun sets in Rizhao city, Shandong province, Mar 25, 2015. [Photo/IC]

BEIJING - China's new home prices dropped at a slower pace month-on-month in March, further good news for the property market after the government rolled out fresh measures to relax curbs.

Average new home prices dropped by 0.15 percent to 10,523 yuan ($1,713) per square meter in 100 Chinese cities in March, the 10th straight month of decline, the China Index Academy, a leading property research organization, said on Wednesday.

However, the pace of the decline narrowed from 0.24 percent in February, partly due to a cut in interest rates announced by the central bank in late February.

The academy said that the overall market performance picked up and property developers' stockpiles dropped slightly on the back of an improving market environment and more active promotion by developers.

Apart from the rate cut, the government work report in March said that China supports people's demand for housing for personal use and second homes, and promotes stable development of the real estate market.

On Monday, the central bank and another two government organs announced a cut to the minimum down payment requirement for second home buyers - to 40 percent from 60 to 70 percent.

Minimum down payments for first and second home purchases using the housing provident fund, which offers urban residents lower rates than those of commercial banks, were also lowered.

Meanwhile, the Ministry of Finance announced that sales of homes purchased more than two years ago will be exempt from business tax. Previously, the exemption was just for homes bought more than five years.

"Policies for stabilizing property consumption are now basically in place. Looking ahead, the measures will greatly speed up the de-stocking process and promote the steady and healthy development of the housing sector," according to the academy.

Li Guozheng, market director of the academy's central China branch, said the raft of measures would give developers impetus to increase new home supply and encourage potential buyers to finally buy.

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