(Yicai) Aug. 12 -- The number of visits to apartments on sale in Beijing surged after the Chinese capital city relaxed restrictions on homes located within the Fifth Ring Road and raised the maximum amount buyers can borrow from the housing provident fund.

The Longfor Guancui project near Zhongguancun Science Park saw an about 37 percent increase in traffic over the past weekend from the previous one, a sales staffer told Yicai. Many buyers who were previously hesitant because of financial pressure decided to purchase thanks to lower-cost provident fund loans.

On Aug. 7, Beijing issued a new policy allowing residents without local household registration to buy a home within the Fifth Ring Road -- the expressway encircling the city center and some suburbs -- after paying social security or individual income tax in the city for just one year, down from two. 

Moreover, eligible first-time homebuyers in Beijing can now secure a housing provident fund loan of up to CNY3.4 million (USD503,980), more than double the previous CNY1.6 million. These loans are popular due to their much lower interest rates compared with bank mortgages.

“Two groups of returning clients opted for larger four-bedroom units, as the higher provident fund loan ceiling under the new rules eased their payment burden,” the staffer said.

Sales offices of projects represented by Heshuo Institution reported a 50 percent to 60 percent increase in viewing last weekend from the one before, while the transaction volume rose by about 10 percent to 20 percent, Guo Yi, chief analyst at Beijing-based property consultancy Heshuo, told Yicai.

Ordinary residential projects located between the Fifth Ring Road and Sixth Ring Road, with relatively mature surrounding amenities, received the most notable boost from the new policy, Guo noted.

The new policy also gave a boost to Beijing’s pre-owned property market. “Inquiries and home-viewing appointments at our outlets jumped last weekend, a second-hand house realtor told Yicai. “The revised provident fund loan rules delivered clear benefits to the market.”

With the maximum amount buyers can borrow from the housing provident fund doubling, most ordinary second-hand properties can be fully covered, removing the need for many to resort to higher-interest commercial bank mortgages, Guo said, adding that the new policy is likely to deliver a stronger boost to the transaction volume of pre-owned rather than new homes.

Sales of new projects outside the Fifth Ring Road, as well as high-end projects within the Fifth Ring Road, are yet to show any clear sign of improvement, an employee at a leading real estate developer told Yicai.

While most sought-after projects reported increased viewing over the past weekend, sales at previously slow-selling projects remained “largely unchanged,” another property agent noted.

Editors: Tang Shihua, Futura Costaglione