Thirty mainland Chinese cities lowered mortgage rates for first-time buyers to below a key level in January, according to the Beike Research Institute, as local governments respond to Beijing’s pledge to help people get onto the property ladder. The number of cities offering rates of 4.1 per cent or less – a level perceived as very low in China – grew from 19 to 30 in just two weeks, Beike’s data showed. Eight of them are second-tier cities, and the rest are third- or fourth-tier. Rates in major cities such as Beijing, Shanghai and Shenzhen remain higher, at 4.6 per cent on average. Nanning in the southwestern province of Guangxi, Zhuhai in Guangdong, and Zhuzhou and Changde in central Hunan province are offering the country’s best mortgage rate at 3.7 per cent. Twenty of the 30 cities offer a rate between 3.8 and 3.9 per cent. Beike said 15 cities cut their mortgage rates for the first time in January. They include Greater Bay Area cities such as Huizhou, Zhongshan and Zhuhai, as well as provincial capitals like Xiamen in Fujian province, Zhengzhou in Henan, and Taiyuan in Shanxi province. The data shows local authorities are taking steps to ease restrictions on homebuying, in line with recent directions from the central government as it tries to boost the flagging property market . On January 5, the People’s Bank of China said if the prices of newly-built houses dropped for three consecutive months in a year, local authorities could choose to maintain, lower or even eliminate minimum interest rates on loans for a first home. The central bank’s announcement came on the same day that Ni Hong, the minister for housing and urban-rural development, went on national television to promise “strong support” for first-time buyers by lowering down payment ratios and mortgage rates. “We expect more cities to lower mortgage rates for first homes as the policy continues to be implemented at local levels,” said researchers from Beike in a January 17 note. The research institute’s data shows that mortgage rates for first homes in 100 mainland Chinese cities have fallen from a peak of 5.74 per cent in September 2021. Hu Jinghui, chief economist at the Jinghui Think Tank, said that while a lower mortgage rate can boost the property market , the down payment ratio is more important. More than 80 cities have cut the ratio to 20 per cent for first homes from 25 per cent, which is the norm in China. “We will need to observe how the property market goes in the second quarter and the signals from the ‘two sessions’ in March to see if recovery is on the horizon,” he said, referring to China’s annual parliamentary meetings.