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ATAHK reads from Shenzhen Daily that CHINA cut mortgage rates and down payment levels for some home buyers yesterday for the first time since the 2008 global financial crisis, making one of its biggest moves this year to boost an economy increasingly threatened by a sagging housing market.
Second-home buyers can now get a 30 percent discount on their mortgage rates if they have fully repaid their previous mortgage loans, a privilege previously limited only to first-home buyers. Down payment levels were also cut to 30 percent from 60 percent to 70 percent, according to the announcement jointly made by the People’s Bank of China and the China Banking Regulatory Commission.
The relaxation of lending rules for home buyers was accompanied by steps to increase financing for cash-strapped developers, which may have problems paying their debts if the property downturn persists.Yet some analysts cautioned investors against thinking that the housing market and broader economy were poised to stage a stunning recovery. A glut of unsold or unoccupied homes and buyers’ expectations of further price declines could temper any rebound.
The news, which came on the eve of the National Day Golden Week holiday, signalled that China’s central authorities were serious about preventing further deterioration in the property market.To support the housing market, which accounts for about 15 percent of China’s economy, 40 of 46 regional governments have already abolished housing investment limits that were originally in place to calm frothy home prices.
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