(Yicai) Aug. 6 -- Sales of new and pre-owned homes in Shanghai increased last month for the third month running, after the government rolled out a slew of supportive policies in May, such as cutting down payment ratios and mortgage interest rates, according to the latest data.

Transactions of new and second-hand homes in Shanghai are expected to jump 12 percent in July from a year earlier to reach 2.1 million square meters, according to data from the Shanghai Real Estate Trading Center.

This is a reflection that the latest measures introduced on May 27 are taking effect. The down payment ratio for first-time homebuyers was slashed to 20 percent from 30 percent. And that for second homes was lowered to 35 percent in downtown areas from 50 percent, and in the six outlying districts of Jiading, Qingpu, Songjiang, Fengxian, Baoshan and Jinshan as well as the Lingang New Area of Shanghai Pilot Free Trade Zone it was reduced to 30 percent from 40 percent.

The floor rate of mortgages has also been lowered. The minimum interest rate on loans for first homes has been reduced to 3.5 percent from 3.85 percent and for second homes to 3.9 percent from 4.25 percent. And in the six outlying districts, the minimum rate for second homes is now 3.7 percent.

Shanghai’s second-hand housing market did very well in June and July following the roll out of the new policies, reversing the usual downward trend after March and April, according to figures from the center. More than 15,000 units have changed hands each month in the five months since May.

In terms of new housing, 54 projects came on the market in Shanghai in June and July, a gain of 35 percent from the first five months. And average sales on the opening days topped 50 percent, higher than the 40 percent observed from January to May.

If the down payment ratio and mortgage interest rates can be lowered further, this will help maintain the stability of Shanghai’s real estate market, said Song Hongwei, research director at Tospur Research Institute.

The PBOC’s Shanghai head office continued to emphasize financial support for the city’s new real estate policies at the meeting it held on Aug. 2 to plan for the second half, said Zhang Bo, director of the property think tank 58 Anjuke Institute. This includes reducing home purchase costs, ensuring the on-time handover of properties and promoting housing rentals, among other measures.

Editor: Kim Taylor