Friday, June 2, 2023
HomeEconomyChina eases mortgage rate floor to revive property sector

China eases mortgage rate floor to revive property sector

BEIJING (Reuters) – China’s local governments may ease mortgage rate floors for first-time homebuyers in some cities in stages to support house prices and revive weakening ones, the central bank said on Thursday. The engine of the world’s second largest economy.

Places will be allowed to decide by the end of 2022 whether to maintain, lower or remove floors for such buyers, the People’s Bank of China (PBOC) said in a statement on its website. stated in the statement.

In May, the central bank lowered the floor on mortgage rates for first-time homebuyers to 20 basis points below the prime rate (LPR) for loans of similar duration. The benchmark interest rate for a 5-year loan is 4.30%.

For cities where the sales price of newly-built commercial housing fell in the month – the central bank said that it will relax the lower limit of mortgage interest rates from June to August month-on-month and year-on-year 2022.

The central bank stated that these policy measures will help support city governments to make full use of the policy toolbox and promote the stable and healthy development of the real estate market.

Banks and customers can negotiate and determine the specific interest rate of new housing loans, which will help reduce borrowers’ debt burden and better support housing demand.

China is stepping up its response to a deepening property crisis – a major drag on the world’s second-largest economy as buyers refuse to pay for unfinished property The construction pays the mortgage loan, and the financial pressure of the developer further damages the company

“To resolve the risks in the real estate industry, it is necessary to stabilize residents’ expectations, stabilize income and purchase intention, ensure rigid housing demand, and reasonably support and improve demand, Facilitating a Stable Recovery Bruce Pang, Chief Economist and Head of Research, Jones Lang LaSalle Greater China.



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