The mainland's interest rate cut last Saturday, its fourth in seven months, will help power the country's housing market recovery in the second half as developers accelerate project launches, analysts said. With the latest 25-basis-point cut, China's mortgage rates hit a new trough that will make housing more affordable and prompt some hesitant buyers to enter the market. The flipside is that easy policies will exhaust housing demand for the next few years. The move "adds a crowning touch to the housing market's healthy close in the first half, and will greatly increase confidence for its performance in the second half", said mainland property consultancy China Real Estate Index System (CREIS), an affiliate of Soufun Holdings. Commercial bank loans of above five years now cost 5.4 per cent per year, while those borrowing from the local governments' subsidised housing provident funds need to pay only 3.5 per cent per year. Both are lower than levels at the height of the global financial crisis in 2009. More importantly, economists said the latest move, which came earlier and stronger than expected, cleared up previous concerns about an end to the central bank's monetary relaxation. "We expect the move will help to stabilise [stock] market sentiment and lend support to property sales and economic growth in the second half," said Barclays China economist Chang Jian. "We maintain our view of one more benchmark rate cut of 25 basis point in the third quarter." China's housing market has already stepped out of a one-year correction, led by Shenzhen, where prices for some existing homes have more than doubled since April. Expectations of further policy support are fuelling hopes the recovery will be sustained and spread to more cities, although the outlook for the third- and fourth-tier cities remains bleak due to record inventories. Property inventory was reduced for the first time in three years, by 150,000 square metres in May to 657 billion square metres, the National Bureau of Statistics said, when reporting that 20 of the 70 major cities on its radar posted a month-on-month rise in home prices, up from 18 in April. Many developers are also betting that those who have made fortunes in the stock market, which has become more volatile after a sustained rally, will park their wealth in the property market, as alternatives are limited within the country. As for investors deploying money abroad, opportunities are crimped by capital account restrictions. These factors will encourage developers to speed up their launch of projects in the second half, when traditionally they will reap more revenues than in the first half. Data from CREIS showed Chinese developers last week launched 58 projects in the 10 cities it tracks, including seven in Shenzhen, and five each in Beijing and Shanghai. These new units are either 8.5 per cent more expensive than those sold in previous phases or priced 0.4 per cent higher than those currently on sale in the neighbourhood. The average daily sales volume, by floor space, in June until last Saturday is 72 per cent higher than a year earlier, CREIS said.