China's commercial hub, Shanghai, has reduced the minimum downpayment ratios for home buyers and eased some home purchase restrictions. This follows the country's recent national measures aimed at stabilsing the market.

Having come into effect on Tuesday, Shanghai has lowered the minimum downpayment ratio to 20% for first home purchases and reduced the ratio for second home purchases to 30% in suburban areas and 35% in the rest of the city.

Previously, Shanghai had set the downpayment ratio at 30% for first home purchases and 40-50% for second homes, Reuters news agency reports.

Additionally, the city will now reduce the minimum interest rates on first home mortgages to the loan prime rate (LPR) minus 45 basis points, compared to the earlier rate of LPR minus 10 basis points.

The city will also ease home-buying restrictions for non-Shanghai residents by reducing the number of years of social insurance and income tax payments required for eligibility. 

In addition, it will remove restrictions on home purchasing by divorced couples.

Earlier this month, China unveiled measures aimed at stabilising the country’s property sector, by reducing the downpayment ratio for home buyers as well as slashing interest rates of mortgages.

At the national level, China has lowered the minimum down payment ratio to 15% for first homebuyers and to 25% for second home purchases.

Furthermore, in the country’s four first-tier megacities - Shanghai, Beijing, Shenzhen, and Guangzhou - the minimum down payment and mortgage interest rates are higher than the national levels, the Reuters report goes on to add.