Beijing has lowered capital requirements for residential property developers, taking a new step to spur the housing market by easing financial terms for builders, as the country increases its efforts to combat the economic downturn.

According to a circular released by the State Council yesterday, developers can start new commercial housing and low-priced dwelling projects with an initial investment of as little as 20%.

The previous capital ratio for developers to start a commercial housing venture was 35%, and 30% for low-priced housing projects.

South China Morning Post