Home Loan Rates up to 20% Above Benchmark in China’s 1st Tier Cities


A new report indicates that rates for home loans in China’s first-tier cities continue to remain at exorbitant levels as the central government endeavours to contain housing prices.

An investigative report from 21st Century Business Herald has found that the minimum first home loan rate provided by China’s big four state-owned banks in the Beijing area is currently 5% above the benchmark rate, while in the Cantonese megacities of Guangzhou and Shenzhen the figure is 10%.

In Guangzhou, Shanghai and Beijing some commercial banks are charging rates of up to 20% above the benchmark for first home loans, although branches of certain large state-owend lenders continue to provide a discount for real estate loans in Shanghai.

Data from China’s National Bureau of Statistics indicates that sales prices for new commercial residential property in first-tier cities posted a year-on-year decline in January, while growth in prices for pre-owned housing shrank for the 16th consecutive month, falling 0.5 percentage points compared to December.