CITIC Construction Investment: Lifting restrictions on purchases outside the Fifth Ring Road in Beijing is a signal of stability in the real estate market.

The research report from CITIC Securities pointed out that Beijing will further optimize its home purchase restrictions and housing provident fund policies. Beijing residents and non-Beijing residents who have paid social security or personal income tax for more than 2 years can now purchase an unlimited number of homes outside the Fifth Ring Road. At the same time, families without housing provident fund loans or those who have already paid off their first loan can now apply for their first housing provident fund loan. The loan limit for families applying for a second housing provident fund loan has been increased from 600,000 RMB to 1,000,000 RMB. The proportion of transactions for homes outside the Fifth Ring Road in Beijing is relatively high. By optimizing the home purchase restrictions, there is hope to increase demand for improved housing outside the Fifth Ring Road and accelerate the inventory turnover of homes in the area. According to statistics, the number of new homes sold outside the Fifth Ring Road accounted for 81.6% of total transactions in Beijing in the first 7 months of this year, while the number of second-hand homes sold accounted for 51.1%. In addition, with the continuing decrease in housing provident fund loan interest rates by 25 basis points this year, the further optimization of the housing provident fund policies in Beijing can reduce the threshold for home purchases and alleviate mortgage pressures. Especially for families who have already paid off their first housing provident loan and are looking to replace their homes, the interest rate for the second housing provident fund loan has been reduced from 3.075% to 2.6%. As a first-tier city, the introduction of new housing policies in Beijing carries significant importance, indicating a strong signal for stabilization in the real estate market. The trend of stabilization in the real estate market in Beijing is expected to continue.