China property crisis: 30 cities cut mortgage rates on first homes to key level in bid to boost struggling market
- Thirty mainland Chinese cities lowered mortgage rates for first-time buyers to below 4.1 per cent in January, says Beike Research Institute
- Local authorities are taking steps to ease restrictions on homebuying, in line with recent directions from the central government
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.
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.
“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.
“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.