Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
In Beijing, a few state-owned Chinese banks are planning to reduce interest rates on current home loans, according to three individuals acquainted with the situation. This action is part of Beijing's broader strategy to rejuvenate the struggling real estate market and support the sluggish economy. The extent of the rate reduction will vary based on client categories and city locations, marking the first such adjustment in China since the global financial crisis.
In certain instances, the decrease might reach up to 20 basis points, as mentioned by anonymous sources who couldn't be identified due to a lack of authorization to communicate with the media. This reduction in current mortgage rates is part of a broader array of measures Beijing has unveiled in recent weeks, spanning property, economic, and market support initiatives. These actions are being taken as concerns escalate regarding the well-being of the world's second-largest economy.
Since 2021, the property sector, constituting around 25% of the economy, has faced a series of crises. Concerns about a potential ripple effect heightened this month following liquidity problems at major developer Country Garden. Following an announcement by the People's Bank of China (PBOC) earlier this month, it was widely anticipated that Chinese banks would reduce interest rates on current home loans as the central bank indicated its guidance for commercial banks to take such action.
The central bank's proposal to decrease rates, prompted by a surge in early mortgage debt repayments, aims to reduce interest expenses for homebuyers and stimulate spending in an economy that's slowing down.
China has been reducing new mortgage rates since the previous year to stimulate activity in its stagnant real estate market. However, the primary outcome thus far has been a rush of households paying off their current mortgages ahead of schedule, putting pressure on banks' profits. This move to lower current mortgage rates is anticipated to further impact the banking sector's net interest margin (NIM), a critical measure of profitability, which reached a historic low by the end of the previous quarter.
Chinese banks have been battling headwinds such as lower lending rates and pressure from the government to prop up the economy, as well as bad debt related to property developers and local government financing vehicles (LGFV). China's mortgage loans totalled 38.6 trillion yuan ($5.29 trillion) at the end of June, representing 17% of banks' total loan books.Zhu Qibing, chief macro analyst at BOC International China, estimates the weighted average rate of new mortgages is 4.11%, while the average rate on all existing mortgages is at least 100 basis points higher.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
We use cookies to give you the best possible service while using our website, please click accept and carry on browsing if you're happy with this. For more information see our Privacy Policy.
Okay, Got it!This disclaimer ("Disclaimer") is applicable to the entire Site. Upon entering the Site it is recommended that you immediately read the Terms and Conditions and Privacy Policy listed therein. Your continued usage of this Site will indicate your unconditional acceptance of the said Terms and Conditions and Privacy Policy. You hereby agree that Propscience reserves the right to modify at any time, the Terms and Conditions and Privacy Policy governing this Site without prior notification. Your usage of the Site implies that you will be bound by any such modification. You agree and acknowledge that it is your responsibility to periodically visit the Site and stay updated with the Terms and Conditions and Privacy Policy of the Website.
The information contained in this Site has been provided by Propscience for information purposes only. This information does not constitute legal, professional or commercial advice. Communication, content and material within the Site may include photographs and conceptual representations of projects under development. All computer-generated images shown on the Site are only indicative of actual designs and are sourced from third party sites.
The information on this Site may contain certain technical inaccuracies and typographical errors. Any errors or omissions brought to the attention of Propscience will be corrected as soon as possible. The content of this Site is being constantly modified to meet the terms, stipulations and recommendations of the Real Estate Regulation Act, 2016 ("RERA") and rules made thereunder and may vary from the content available as of date. All content may be updated from time to time and may at times be out of date. Propscience accepts no responsibility for keeping the information in this website up to date or any liability whatsoever for any failure to do so.
While every care has been taken to ensure that the content is useful, reliable and accurate, all content and information on the Site is provided on an "as is" and "as available" basis. Propscience does not accept any responsibility or liability with regard to the content, accuracy, legality and reliability of the information provided herein, or, for any loss or damage caused arising directly or indirectly in connection with reliance on the use of such information. No information given under this Site creates a warranty or expands the scope of any warranty that cannot be disclaimed under applicable law.
This Site provides links to other websites owned by third parties. Any reference or mention to third party websites, projects or services is for purely informational purposes only. This information does not constitute either an endorsement or a recommendation. Propscience accepts no responsibility for the content, reliability and information provided on these third-party websites. Propscience will not be held liable for any personal information of data collected by these third parties or for any virus or destructive properties that may be present on these third-party sites.
Your use of the Site is solely at your own risk. You agree and acknowledge that you are solely responsible for any action you take based upon this content and that Propscience is not liable for the same. All details regarding a project/property provided on this Site are updated on the basis of information available from the respective developers/owners/promoters. All such information will not be construed as an advertisement. To find out more about a project / development, please register/contact us to visit the site you are interested in. All decisions taken by you in this regard will be taken independently and Propscience will not be liable for any such loss in connection with the same. This Site is for guidance only. Your use of this Site - including any suggestions set out in the Site and or any use of the resources available on this Site, do not create any professional - client relationship between you and Propscience. Propscience cannot accept you as a client until certain formalities and requirements are met.
We use cookies to give you the best possible service while using our website, please accept it and continue browsing if you're happy with this. For more information see our Privacy Policy