Concrete step for destocking

In a move believed to be aimed at reviving the housing market, the People's Bank of China and the China Banking Regulatory Commission announced on Tuesday that the down payment requirements will be reduced from 25 percent to 20 percent for first home buyers and from 40 percent to 30 percent for second home buying.

The move, which marks a further cut in down payments, is a concrete step toward destocking the country's growing inventory of unsold homes.

Since destocking the housing market was set as a key task for this year at the Central Economic Work Conference in late December, there have been expectations of such measures. But compared with other policies, such as preferential loan interest rates, the reduction of down payment requirements is a more direct incentive and expected to be more effective in spurring housing sales given that it will lower the threshold for home buying and bring to the market those who could not afford the higher down payments.