First home loan rates have risen to unprecedented highs in major cities around China according to the latest figures from financial data provider Rong360.
Data from Rong360 indicates that the average first home loan rate for China tapped the historic high of 5.12% in August, marking the first time since 2016 that rates have breached the 5% threshold.
The average rate in August was 1.04 times the benchmark rate, for a month-on-month increase of 2.47%, as well as a year-on-year rise of 15.3% compared to the average rate of 4.44% in August of 2016.
Rong360 analysts point out that in addition to home loan rate hikes in first and second tier cities, some county-level cities have also started to raise rates to levels above those of the major urban centres.
According to its data property control policies have in general pushed rates for first home buyer loans to 5% – 10% above the benchmark rate in urban centres around China.
In the major first-tier cities of Beijing, Guangzhou, Shanghai and Shenzhen the average first home loan rate ranged between 4.83% and 5.13% in the month of August.
For Beijing the average rate was 5.12%, while in the Guangdong province cities of Guangzhou and Shenzhen average rates were 5.13% and 5.04% respectively.
In Beijing none of the 30 banks monitored by Rong360 provided currently provide first home buyer loans that are discounted to the benchmark rate.
Nine provide loans that are on par with the benchmark rate, eight provide loans at a 5% premium, while a further 10 charge a 10% premium.
In the southern manufacturing hub of Shenzhen the vast majority of banks charge premiums against the benchmark rate for first home buyer loans.
All of the big four state-owned banks charge rates that are 5% above benchmark, while some commercial banks have raised rates 10% above benchmark, including China Minsheng and Industrial Bank.