Chinese authorities have already stepped up efforts to cushion falls in the flailing property sector:
- PBOC rate cuts have trimmed mortgage rates (admittedly the cuts are very small, so far at least)
- the 'three red lines' borrowing rule has been eased (link here for more on this)
Reuters have a small item up now on another potential step:
- lowering the high mortgage down payment ratios many municipal authorities have enacted to cool speculation, as high as 80% in some locations. Mortgage loans grew only 11% year-on-year in the third quarter, the slowest rate since 2013. Reducing those would probably bring some buyers back to the market and put a floor under falling prices. That in turn might revive interest in M&A and improve developer balance sheets without increasing their borrowing.
The piece goes on with some of the potential downside of doing so. Link here if you'd like to check it out.