China has proposed setting mortgage rates for certain home buyers

BEIJING, Jan 5 (Reuters) – China’s central bank and bank and insurers have established a stricter adjustment system on mortgage payments for first-time home buyers, the central bank said on Thursday, in an effort to further support the property sector.

For cities where new home sales have fallen month-over-month and year-over-year for three consecutive months, the mortgage floor for first-time home buyers could be reduced or eliminated in phases, according to and an explanation a. the People’s Bank of China (PBOC).

At the end of September, the central bank allowed the centers to carry out such actions until the end of 2022. read more

The move is more flexible than the September move, said Chen Wenjing, analyst at the China Index Academy, one of China’s largest housing research firms, adding “it will reduce the cost of buying a home and help to better support and improve housing needs.”

The crisis in China’s property market, once a pillar of the world’s second largest economy, worsened last summer with house prices, sales and investments all falling.

In recent weeks, lawmakers have stepped up support for the industry to release a long-term water crisis that hit developers and delayed the completion of many housing projects, scaring consumers.

According to the researchers’ calculations, 38 cities are eligible for flexible mortgage floors, including some secondary cities such as Wuhan and Zhengzhou and more than 20 small cities.

According to the researchers, the move shows the growing intention of the government to support the needs of vulnerable towns, but added the impact may be limited.

“The reduction in mortgage rates has not been able to buy the purchase. We think that the reliability of the building is more important than the affordability,” said the analysts at JPMorgan in a letter investigate.

Ni Hong, the head of China’s housing authority, also vowed to provide strong support to first-time home buyers by allowing smaller down payments and cutting mortgage interest rates wherever necessary. , according to state-run CCTV broadcast on Thursday.

Ni said that “adequate” support is needed to provide second-home buyers, although not for the purchase of three or more houses, and he believed that the property market would stabilize and recover. in 2023.

Reporting by Liangping Gao, Ellen Zhang and Kevin Yao; Edited by Mark Potter, Chizu Nomiyama and Kim Coghill

Our Terms: The Thomson Reuters Trust Principles.


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