New policies of Beijing, Shanghai help boost housing purchase intention

House buying intention has seen an increase after Beijing and Shanghai announced further tax incentives on Monday.

The two cities announced to eliminate the distinction between ordinary and non-ordinary housing, which will result in tax reduction for property transactions.

Houses over 140 square meters are usually classified as non-ordinary housing and face higher transaction tax rates.

In accordance with the new policy, which will take effect on December 1, the two cities will exempt individuals from a 5-percent value-added taxes (VAT) on the sale of non-ordinary properties that have been owned for two years or more.

"We have seen noticeable rise in online consultancies and in customer visits. Many customers who have been hesitating now decide to tour around the houses for sale and embark on home purchasing. We can feel that their willingness to buy a house is going up," said Han Yu, a real estate agent in Beijing.

The two cities will also adopt a unified nationwide policy on personal housing deed tax.

For homes measuring 140 square meters or less, the deed tax is reduced to the minimum rate of 1 percent, while a reduced rate of 1.5 percent applies for properties larger than 140 square meters.

For those purchasing a second home for their family, a reduced deed tax rate of 1 percent will be levied for properties of 140 square meters or smaller, while a reduced rate of two percent will apply for properties larger than 140 square meters.

"The policies are really implementable. Like, for homes measuring 140 square meters or less, the deed tax is reduced to 1 percent. For families that have two children, the policy is really helpful. Since the two-child policy took effect, many families have more babies. As children grow, many families want to move from their original two-bedroom apartment to a three-room one. My house is no longer big enough to live, so, I have been touring around the houses for sale," said Zhao Jing, a Beijing resident.

In response to the sluggish property market, China has introduced a series of measures in recent months, including reductions in mortgage rates, lower down-payment requirements, and the easing of purchase restrictions.

New policies of Beijing, Shanghai help boost housing purchase intention

The European Central Bank (ECB) announced on Thursday that it would slash key interest rates by 25 basis points in a bid to wind down the restrictive monetary policy.

Effective from March 12, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.50 percent, 2.65 percent and 2.90 percent respectively, said the central bank in a statement.

The disinflation process is well on track, with headline inflation averaging 2.3 percent in 2025, 1.9 percent in 2026 and 2.0 percent in 2027, the ECB said.

The decision to keep on cutting rates came at a time when the economy in the eurozone is facing increasing uncertainties.

In its latest edition of the staff projections on Thursday, the ECB lowered its forecast for economic growth in the eurozone to 0.9 percent for 2025, 1.2 percent for 2026 and 1.3 percent for 2027.

This marks a downward revision from the ECB's forecast in December last year, which had projected 1.1 percent growth in 2025 and 1.4 percent in 2026, while the 2027 outlook remains unchanged.

The ECB attributed the weaker growth outlook for 2025 and 2026 to declining exports and sluggish investment, citing high trade policy uncertainty and broader economic instability as key factors.

ECB cuts interest rates by 25 basis points