With China’s homebuyers crying out for help, analysts say time is ripe for mortgage relief
- To aid China’s beleaguered homebuyers, a gaggle of policy analysts has recommended a reduction in mortgage rates and more affordable housing
Many residents in China are still paying hefty interest on their mortgages because they bought their homes when prices were high, said Zhou Tianyong, a professor with the Dongbei University of Finance and Economics and a former senior researcher with the Central Party School in Beijing.
“The central bank could introduce monetary policy to reduce interest rates on existing loans for hundreds of millions of residents who bought homes at high prices,” said Zhou in a post on his WeChat account on Tuesday.
“It is possible that the previous generation won’t be able to repay it, and the next generation will now have to pay. This may not be in line with the [government’s] people-centred approach,” Zhou said.
The academic estimated that homebuyers had to pay a cumulative 5.74 trillion yuan (US$789 billion) in interest on their mortgages, and – after factoring in the allocation of extra income to cover high housing costs in addition to interest – 41 trillion yuan of consumption was lost between 2000 and 2023.