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Shanghai revises ‘normal’ homes criteria
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SHANGHAI’S housing authority yesterday unveiled a revised criteria for “normal” homes to help buyers qualify for preferential policies and boost sales of low-to mid-class homes.
A flat within the city’s Inner Ring Road priced below 4.5 million yuan (US$734,000) will be defined as normal housing effective from next Thursday, the Shanghai Housing Support and Building Administration Bureau said on its website. The current cap is 3.3 million yuan.
Between the Inner and Outer Ring roads, the price cap will be 3.1 million yuan, up from the present cap of 2 million yuan.
Beyond the Outer Ring Road, it will be 2.3 million yuan, compared with 1.6 million yuan currently, the authority said.
All flats must not be larger than 140 square meters in gross floor area to be considered normal housing, a criteria that remains unchanged.
The city’s current criteria for normal housing took effect from March 2012.
“It is a timely adjustment made by the housing watchdog as it will allow more buyers to benefit from the new mortgage policies announced in late September,” said Lu Qilin, a researcher with Shanghai Deovolente Realty Co.
“We expect sales of mid- to low-end homes to climb notably after the implementation of the new criteria.”
From the beginning of this year to Wednesday, only 40 percent of those homes sold in the city which are located beyond the Outer Ring Road could be defined as normal housing under the current criteria, according to Deovolente.
However, after the new criteria takes effect, 70 percent of them could be defined as normal housing.
Only buyers of normal houses are eligible for preferential policies announced in late September by the central bank, the local government said earlier.
Buyers who own a home and have paid off their mortgage are now viewed as first-home buyers and are eligible for discounted mortgage rates of as much as 30 percent off the benchmark lending rate, the central bank said on September 30. For down payments, the new rule is that all first-home buyers can pay as little as 30 percent of the total price.
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