The latest data indicates that first home loan rates in China posted a robust year-on-year rise in February, with analysts pointing to further room for increase.
A new report from Rong360 indicates that China’s average first home loan rate in February was 5.46%, or 1.114 times the benchmark rate, for an on-month rise of 0.55% and a year-on-year leap of 22.15%.
According to the report’s data 53 out of the 533 banks monitored by Rong360 in 35 Chinese cities raised first home loan rates in February, accounting for 9.94% of the total.
469 banks, or 87.99% of lenders monitored, kept rates on par with the preceding month, while only 7, or 1.31% of the total, made downwards adjustments.
A total of 34 bank branches have temporarily suspended processing of first home loan applications, for a decline of three bank branches compared to January.
Shanghai’s average first home loan rates were the lowest, at 5.06%, while the Henan province capital of Zhengzhou was host to the highest, at 5.92%.
China’s first-tier cities had average first home loan rates of between 5.06% and 5.44%, while 15 out of the country’s 19 leading banks charging rates over 10% above benchmark, for an increase of four banks compared to January.
The average second-home loan rate lifted to 5.79% in February, with Rong360 analysts expecting banks to continue to lift rates and tighten lending volumes this year, or even temporarily suspend lending.
Rong360 forecasts further room for hikes in home loan rates, given that Beijing has made it clear that it will continue to maintain tight controls on China’s real estate markets.