China reduces mortgage rates to boost home sales in hard-hit cities as Beijing seeks to prop up property market
- First-time buyers in cities with falling home prices can access reduced mortgage rates, the People’s Bank of China announced on Thursday
- 23 of the 70 largest cities in the country are eligible for the rate-cut discretion, according to a Post calculation based on official statistics
China’s central bank is giving local governments the green light to woo first-time homebuyers in what analysts see as a strong signal of support for the bruised property sector ahead of the country’s 20th party congress in mid-October.
Cities where new home prices fell from June through August on both a month-over-month and a year-over-year basis can reduce mortgage rates for first-time buyers, the People’s Bank of China announced on its website on Thursday night.
“It is a rather strong statement from the central bank with a determination to stabilise the housing sector,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute. “The policy particularly underscores cities having poor sales performance in the third quarter, which means the top officials have to pay attention to the situation.”
Contracted sales at China’s top 100 property developers fell by about a third in August year on year, following a 40 per cent drop in July and a 50 per cent decline in June.
