Rates for first home loans have fallen in cities across China, following a push from the central government for measures to better support economic stability in the wake of renewed Covid lockdowns.
A number of banks in at least 13 Chinese cities have reduced rates for first home loans to 4.25% in just the past month, after regulators announced that the floor for rates would be set at 20 basis points beneath the loan prime rate (LPR), according to a report from Securities Daily.
These cities include Tianjin, Nantong, Suzhou, Qingdao, Jinan, Chongqing, Weifang, Tangshan, Guizhou, Xiangyang, Zhuhai, Zhengzhou had Hohhot.
According to the report first home loan rates at most other banks remain at around at least 4.8% level, while for second-homes the rate is at around 5.05% in many locations.
At least 32 cities have also reduced their first home loan deposits to just 20%.
Ming Ming (明明), chief economist with CITIC Securities, said that recent credit data indicated that mortgage growth in home loans and medium-to-long term lending was comparatively low.
“The ongoing loosening of real estate-related policies will have a marked driving effect on household demand for homes and credit growth, and in the next several months overall credit growth will accelerate,” said Ming.