Experts see firm market despite sales slowing
The long-heralded new measures by the mainland aimed at deterring property speculation will succeed in slowing surging sales and prices but are unlikely to send the market reeling, according to developers and real estate analysts.
The People's Bank of China and the China Banking Regulatory Commission announced late on Thursday the expected increases in mortgage interest rates and down-payment requirements for people who already own one home.
Under the measures to be implemented after the National Day holiday, the minimum down payment for secondary and investment homes was boosted to 40 per cent from 30 per cent and for commercial properties to 50 per cent from 40 per cent.
The mortgage period for commercial properties was also limited to a 10-year maximum. For dual-use properties, the authorities raised the down payment to 45 per cent from 40 per cent.
The central bank and the CBRC also required that mortgage rates for secondary and investment homes and commercial properties must be at least 1.1 times the benchmark lending rate. That should boost rates by about 25 per cent, as banks offered a 15 per cent reduction on the benchmark rate, analysts said.