Shenzhen banks become first in China’s megacities to ease mortgage rates – others may follow suit, say analysts
- China Merchants Bank is offering rates as low as 5 per cent above the benchmark, compared with 10 per cent at most lenders
- Local authorities have been given more leeway by Beijing to control their own property markets
Mortgage rates in Shenzhen have begun to creep down, in a sign that the strict property controls holding house prices in check in mainland China’s biggest cities may be starting to loosen.
Some of the southern city’s banks have tentatively lowered their borrowing costs for homeowners in the last few days, making Shenzhen the first of China’s so-called tier-1 cities to bring down the prohibitively expensive rates.
Analysts said lenders in other megacities may follow suit.
The average mortgage rate for first-time buyers in Shenzhen declined to 5.46 per cent from 5.57 per cent a month ago, according to Rong 360, a customised loan services provider which tracks banks’ mortgage rates. The rate for second-home buyers edged down 6 basis points to 5.74 per cent.
But in recent days, the rate offered by some banks has dropped even further.
We may see more cities with elevated mortgage levels follow Shenzhen’s lead
China Merchants Bank’s branches in Shenzhen are now offering rates as low as 5 per cent above the national benchmark rate, down from 10 per cent two days ago, according to an inquiry by the Post with one of its loan officer.