Mainland China banks stay put on mortgage rates and down payment requirement
Requirement on down payment also remains unchanged after new property measures
Mainland banks have yet to raise mortgage rates after a new round of property curbs was announced at the end of last month.
In a bid to crack down on speculation that has helped fuel a strong rally in prices since the second half of last year, the State Council has endorsed the People's Bank of China to raise down-payment requirements and mortgage rates for second-home buyers of properties in cities where prices have risen sharply.
Bank of China's chairman Xiao Gang said the lender had not raised down-payment requirements and mortgage rates for second-home buyers yet.
"Details of property loan policies have not been worked out," said Xiao on the sidelines of the National People's Congress yesterday. "We are still implementing the existing policies."
Under the current requirements, effective since 2011 for second-time buyers, down payment should be no less than 60 per cent of a property's price and mortgage rates no lower than 1.1 times benchmark rates.
Yang Kaisheng, the president of the Industrial and Commercial Bank of China, said the lender would make adjustments "according to policymakers' new requirements" and after accommodating risks in the real estate sector.
PBOC governor Zhou Xiaochuan said on Wednesday that the central bank would continue to use down payment and mortgage rates to ease property prices, with some measures to be escalated. He did not elaborate.
Mainland banks were not as pressured as those in Hong Kong to raise lending rates because they operated in different markets, said BOC president Li Lihui.
"Hong Kong is a highly exposed international financial market. Many countries have introduced loose monetary policies and interest rates are low in the global market. For the time being, lending rate rises by Hong Kong banks are necessary," Li said. "However, the impact [of the international market] on mainland China is not big."
The mainland's financial market is not fully opened, with the yuan under capital accounts remaining largely unconvertible. Interest rates are stipulated by the central bank, with lenders allowed to float deposit rates up to 10 per cent above benchmark rates and lending rates up to 30 per cent below benchmarks.