China's relaxation on the financial requirement ratio of commercial property investment will give an impetus to the country's property market, Saturday's China Daily reported.
The policy will help to ease property developers' capital strain and stabilize housing prices, it said, citing analysts.
The State Council, the country's cabinet, announced this week that, for the first time in 13 years, the minimum capital requirements for starting a new commercial property or an affordable housing project had been lowered from 35 percent of the total project cost to 20 percent.
The move was seen as a key adjustment in the government macroeconomic measure to fight the economic slowdown and revive the housing market, as the reduction indicated a lowered threshold for real estate developers to apply for bank loans, said analysts.
Liu Yuanchun, deputy head of school of economics at Renmin University of China, said real estate investments may start to recover in the second half of this year thanks to government's stimulus measures.
"The 15 percentage points reduction in financial requirement ratio is expected to release 300 billion yuan (about 43.92 billion U.S.dollars) for investment in new property projects," Liu said.
The move will boost market vibrancy and increase property supply, and also help drag down property prices, he added.
China's real estate investment grew 4.1 percent to 488 billion yuan in the first quarter of this year. The figure was 28.2 percentage points lower from a year earlier.
The country's fixed assets investment rose 28.6 percent, or 2.36 trillion yuan in value in the same period.
(Xinhua News Agency May 30, 2009)
