The Guangdong province capital of Guangzhou has seen further reductions in interest rates for real estate loans, amidst efforts by Chinese regulators to stymie the market impacts of debt defaults by major developers.
The Guangzhou branch of ICBC has recently reduced the rate for first home loans from 5.85% (LPR + 120BP) TO 5.65% (LPR + 100BP), while the rate for second homes has fallen from 6.05% (LPR + 140BP) to around 5.85% (LPR + 120BP).
Home loan rates in China have posted continual declines since September, as Chinese regulators endeavour to deal with the fall out from the Evergrande Debt debacle.
The rate declines in Guangzhou arrive after the city posted a total of four home loan rate hikes in the first half of 2021, following efforts by the Chinese central bank to contain the property lending ratios of banks with the release of the “System on Establishing Banking Sector Financial Institution Real Estate Loan Concentration Management” (关于建立银行业金融机构房地产贷款集中管理制度) at the end of 2020.
Domestic observers anticipate further declines in Chinese home loan rates in the first half of 2022, with quotas set to then tighten up in the second half.