Technical Analysis

ICYMI – China has further loosened mortgage rates for cities with home price declines

Back in September 2022 the People’s Bank of China and China’s banking regulator ushered in measures that allow lower mortgage rates for first-home buyers if newly-constructed house prices drop for three consecutive months.

Thursday statement out of China extends the measures, to the effect that:

  • Cities that have shown m/m & y/y housing price drops for three consecutive months are eligible to maintain, lower or remove minimum interest rates on loans for first-home purchases, according to a statement (link in Chinese) from the PBOC and the banking regulatory agency Thursday evening.
  • base line for assessment of house price drops is December 2022
  • intended to “form a long-term mechanism to support a stable and healthy property market”
  • once a city’s home prices increase for three consecutive months, local governments should re-adopt the national minimum interest rates on first-home loans
  • the current rules for second-home mortgage loans are unchanged


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