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China property
BusinessChina Business

China pledges lower mortgage rates, ‘strong support’ for first-time homebuyers in bid to rescue ailing property market

  • Move signals Beijing’s intention to keep relaxing its grip on the property sector and stimulating demand in 2023, analysts said
  • Chinese buyers bought 10.8 trillion yuan (US$1.58 trillion) worth of new homes as of October, 25 per cent short of the same period in 2021

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The central bank said if newly-built home prices drop for three consecutive months in a year, local authorities can choose to maintain, lower or even eliminate minimum interest rates on loans for a first home. Photo: Bloomberg
Elise Makin Beijing
China has begun the new year by extending its policy of easing mortgage rates and pledging “strong support” for first home purchases with the aim of turning the tide for its ailing property market.
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Both moves signal the country’s intention to keep relaxing its grip on the property sector and stimulating demand in a sluggish market throughout 2023, analysts said.

On Thursday evening, Ni Hong, the minister of housing and urban-rural development, appeared on national television to reiterate Beijing’s vow to boost confidence in the real estate market.

Speaking to state media, he promised “strong support” for first-time buyers by lowering down payment ratios and mortgage rates. He said there would be “reasonable support” for those buying a second home, and “policy support” for those shopping for a better home for a big family.

His remarks came shortly after a notice was issued by the People’s Bank of China on the same evening. The central bank said if newly-built home prices drop for three consecutive months in a year, local authorities can choose to maintain, lower or even eliminate minimum interest rates on loans for a first home.

11:05

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The positive signals from Beijing sent the Hang Seng Mainland Property Index up 1.6 per cent by the middle of Friday afternoon. Shares of developers Longfor Properties and Country Garden gained 3.7 per cent 2.3 per cent, respectively.

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