China property crisis: 30 cities cut mortgage rates on first homes to key level in bid to boost struggling market

Name: China housing: Can the world’s biggest housing market boom again?
Uploaded: 2023-02-02T06:00:25.000Z
Duration: 11 min 5 s
Description: China housing: Can the world’s biggest housing market boom again?

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

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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. Photo: Bloomberg

Elise Makin Beijing

Published: 2:00pm, 2 Feb 2023Updated: 2:29pm, 2 Feb 2023

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.

11:05

China housing: Can the world’s biggest housing market boom again?

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.